By Barani Krishnan
Investing.com – Gold prices rose for a second straight day on Tuesday, returning to the key $1,900 level, after the dollar and equity markets sank ahead of Presidential Donald Trump’s debate with challenger Joe Biden that could impact the outcome of the 2020 U.S. election.
settled up $20, or 1.1%, at $1,903.20 per ounce on New York’s Comex. The benchmark gold futures contract has gained a cumulative 2% since the week began, heading for its best week in nearly two months.
, which reflects real-time trades in bullion, was up $14.28, or 0.8%, at $1,895.68 by 3:05 PM ET (19:05 GMT), after a session high earlier at $1,899.12.
Republican Trump and Democrat Biden will go head-to-head in their first debate at 9 PM ET (0100 GMT) for the Nov. 3 presidential election.
The state of the economy, the handling of the Covid-19 pandemic and issues of racial inequality and law and order are likely to top arguments in their face-off. Hours ahead of the debate, Biden also released his tax returns — a move that could pressure Trump, who has not done the same and has been accused by the New York Times of having underpaid or not paid any taxes for many years.
The rally in gold could gain further impetus, pushing it closer toward record highs above $2,000 hit in August, if Biden puts in a good performance. A vote for Biden is seen as a vote against the dollar, which has become the default hedge for all that the Trump administration represents. An average of polls on RealClearPolitics.com puts Biden nearly 7 points ahead of Trump nationally.
“It’s a big week for the dollar – Presidential election, jobs report, etc – so we could see some big swings in the coming days,” said Craig Erlam, a macro analyst at OANDA in New York. “I don’t think the correction is finished though and this bit of profit taking we’re seeing may not last. If that’s turns out to be the case, there could be plenty more downside to come.”
The , or DX, which tracks the greenback’s performance versus six currencies, was off 0.4% at 93.922, after a two-month high of 94.795 on Friday. The DX is down 0.8% for week-to-date though it remains up 2% for September, accounting for its best return in 14 months.
Gold last hit record highs on Aug. 7, when the spot price, which tracks bullion, touched $2,703 an ounce, amid a $2,089 peak for traded on New York’s Comex. The yellow metal’s next dalliance at $2,000 came almost two weeks later — between Aug 17 and 18. Notwithstanding that, it has been trading in ranges of $1,980-$1,960; $1,960-$1,930; and $1,930-$1,900.
This week, the threshold went lower, slipping from $1,900 to as low as $1,849, before Monday’s late rebound.
Besides the presidential debate, the other main event for this week is U.S. jobs data for August, due via to be reported Friday. Gold could shoot higher if the August NFP data comes in lower than the 850,000 additions forecast, after July’s jobs growth of 1.37 million.