PRECIOUS-Gold slides on dollar rally as virus fears grip Wall Street
By Brijesh Patel
Oct 28 (Reuters) - Gold fell more than 1.5% and silver nearly 6% on Wednesday as investors flocked to the safety of the dollar with fears of fresh coronavirus lockdowns hammering Wall Street and no immediate sign of U.S. stimulus to ease the economic blow.
Spot gold XAU= hit its lowest since Sept. 28 at $1,872.55 per ounce before recovering to $1,876.01 by 10:09 a.m. EDT (1409 GMT). U.S. gold futures GCcv1 fell 1.9% to $1,876.20.
Silver XAG= slumped as far as $23.09, its lowest since Oct. 7.
"It's risk off and the metals were so dependent on more stimulus at this point and the bear camp is fully in control right here," said Bob Haberkorn, senior market strategist at RJO Futures.
"Overall, the gold market is lower on a strengthening dollar due to the lack of stimulus measures and risk off mentality heading into this election."
The dollar jumped 0.7% to a more than one-week high against a basket of other major currencies .DXY, with the prospect of fresh European lockdowns weighing heavily on the euro and accelerating a tumble in equities. .NMKTS/GLOB
Analysts said that although precious metals prices had dipped, the move was not yet being precipitated by a rush to cover losses elsewhere and meet margin calls, as happened in March.
President Donald Trump on Tuesday said that an economic relief deal would likely come after the Nov. 3 election.
He also questioned the integrity of the U.S. Presidential election, saying it would be "inappropriate" to take extra time to count the millions of ballots cast by mail.
David Meger, director of metals trading at High Ridge Futures said the global pick up in coronavirus cases was also just as important.
"All of those are responsible for the pick up in volatility and the downside in metals prices."
Despite recent volatility, gold, considered a hedge against inflation and currency debasement amid unprecedented global stimulus, is still up about 25% so far this year.
Platinum XPT= fell 2% to $860.83 and palladium XPD=, shed 4.6% to $2,224.43.
Gold versus dollarhttps://tmsnrt.rs/3jCnI1W
(Reporting by Brijesh Patel and Arpan Varghese in Bengaluru; Editing by Kirsten Donovan)
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