BENGALURU, Oct 27 (Reuters): Gold edged lower on Tuesday as a buoyant dollar and lack of progress on a US stimulus package overshadowed fears of a second coronavirus wave and uncertainty about the US presidential elections.
Spot gold fell 0.1 per cent to $1,900.40 per ounce by 0942 GMT. US gold futures were down 0.2 per cent to $1,901.70.
"Gold has done most of its leg work for the year and seems to be trading in narrower ranges at the moment, responding to small moves in the dollar, which in turn is responding to small moves in possible political outcomes in regard to the US election and also the stimulus plan," said independent analyst Ross Norman.
But rising coronavirus cases, especially in Europe, are keeping gold supported, more so because of the possible economic fallout, he added.
A fresh wave of infections has forced many countries, including Russia and France, to impose new restrictions, risking derailing any global economic recovery.
The dollar index held onto gains against rival currencies, denting the appeal of bullion.
Negotiations over a new US relief package remain in limbo with House Speaker Nancy Pelosi expressing hope that an agreement can be reached before the Nov 3 presidential election, while White House economic adviser Larry Kudlow indicated that talks have slowed.
Gold, considered a hedge against inflation and currency debasement, has risen 25 per cent this year, supported by massive government and central bank stimulus worldwide.
Gold consumption in China, traditionally the world's biggest consumer of bullion, rebounded in the third quarter, the China Gold Association said, while dealers in India have been banking on a festival-led demand boost.
Elsewhere, palladium rose 0.4 per cent at $2,360.58 per ounce, while platinum gained 0.8 per cent to $876.46.
Palladium could test $2,600 by mid-2021 bolstered by market tightness and stimulus measures, UBS said in a note.
Silver was flat at $24.31 per ounce.
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