By Myra P. Saefong and Mark DeCambre
Gold futures scored back-to-back session gains on Tuesday, with weakness in the U.S. dollar helping to lift prices to their highest settlement in just over a week.
Traders also eyed progress tied to potential COVID-19 vaccines and a long-sought fresh round of coronavirus relief for American workers and businesses hobbled by the pandemic.
Copper futures, meanwhile, settled Tuesday at their highest in over two years , amid signs of strengthening demand from China.
The U.S. dollar weakened, with the ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY -0.23% down 0.4%, as the euro strengthened against the greenback, supporting dollar-denominated prices for the precious metal, said Chintan Karnani, chief market analyst at Insignia Consultants.
There was “mild short covering as well, as gold price managed to trade over $1,900,” he told MarketWatch. “Leadership change concerns in the U.S. presidential election” also supported gold.
Overall, gold’s appeal as a haven investment has strengthened.
Corporate earnings reporting season continues, worries surround a new wave of coronavirus cases in the Eurozone and socialists claimed victory in Bolivia’s presidential election, said George Gero, managing director at RBC Wealth Management, in a daily note.
Investors have noted these “new worries, bringing urgency to seek havens” such as gold, he said.
December gold /zigman2/quotes/210039572/delayed GCZ20 +0.11% /zigman2/quotes/201432642/composite GOLD -0.22% rose $3.70, or 0.2%, to settle at $1,915.40 an ounce, following a 0.3% gain on Monday. The settlement was the highest for a most-active contract since Oct. 12, according to FactSet data.
Silver futures for December delivery /zigman2/quotes/210319381/delayed SIZ20 +0.56% /zigman2/quotes/210315219/delayed SI00 +0.60% added 28 cents, or 1.1%, at $24.98 an ounce, following a 1.2% rise in the previous session.
A climb in government bond yields, perhaps, tied to the advancement of fiscal stimulus negotiations between lawmakers in Washington, helped to limit gains for gold prices.
The 10-year Treasury note yield BX:TMUBMUSD10Y was up nearly 3 basis points at around 0.79%, with market participants attributing some of the gain to expectations of greater government spending when and if a fiscal package is delivered.
The longer-term outlook for bullion under a regime of greater fiscal aid, however, is still expected to be bullish, according to experts.
Late Monday, House Speaker Nancy Pelosi and U.S. Treasury Secretary Steven Mnuchin “continued to narrow” a range of differences over aid that the Speaker says must be agreed by the end of Tuesday if an accord is to be passed by Congress before Election Day on Nov. 3.
Meanwhile, the CEO of Moderna Inc. /zigman2/quotes/205619834/composite MRNA +16.35% said that the federal government could authorize an emergency use of its COVID-19 vaccine candidate by December if testing of the experimental drug goes well, speaking during the Wall Street Journal’s annual Tech Live conference Monday.
The comments come after Pfizer Inc. /zigman2/quotes/202877789/composite PFE +1.92% said that an antibody treatment to combat the deadly illness could receive similar authorization by November if not the end of the month .
Reports of remedies and treatments for the illness that has stricken some 40 million globally since late last year have often prompt some selling in bullion, but enthusiasts in precious metals point to expected increases in government balance sheets and low interest rates prevailing across much of the developed world as causes for continued optimism around gold and silver.
The acceleration of the virus’s spread in Europe in recent days has been underpinning some of the recent demand for bullion, as well as concerns about the outcome of the U.S. presidential election between Democrat and former Vice President Joe Biden and incumbent Donald Trump.
“There is just too much uncertainty concerning the U.S. elections and coronavirus, which are keeping traders interested in gold prices,” wrote Naeem Aslam, chief market analyst at AvaTrade in a note.
Gold prices pared earlier losses Tuesday after a report on U.S. home builders showed that construction on homes came in at a seasonally-adjusted annual rate of 1.42 million in September, representing a 1.9% increase from the previous month’s lowered figure, the U.S. Census Bureau reported Tuesday .
Among other metals, December copper /zigman2/quotes/210059538/delayed HGZ20 +0.13% tacked on 2% to $3.148 a pound. That was the highest most-active contract settlement since June 2018, FactSet data show.
News of another Chinese import quota, which allows 5,980 metric tons of copper scrap to be imported into China, provided “specific evidence of ongoing Chinese demand for all forms of copper,” analysts at Zaner Metals said in a daily note.
January platinum /zigman2/quotes/214899298/delayed PLF21 +0.62% added 1.6% to $877.30 an ounce and December palladium /zigman2/quotes/214428583/delayed PAZ20 -0.15% settled at $2,417.70 an ounce, up nearly 2.6%.