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Gold slips as dollar stems declines; election uncertainty caps losses

· Gold eased on Friday as the dollar recouped some losses, but uncertainty going into the Nov. 3 U.S. elections limited bullion's losses.

· Spot gold fell 0.1% to $1,903.07 per ounce by 2:06 p.m. EDT (1806 GMT). U.S. gold futures settled unchanged at $1,905.20.

· Bullion has gained over 25% so far this year given its status as an inflation hedge amid unprecedented pandemic-driven stimulus across the world.

· The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.816 after its bounce from levels below 92.8 last week.

· Gold Price Analysis: XAU/USD pressured to break below $1,900

The gold market is range bound and trendless with election and stimulus uncertainty whipsawing prices from day-to-day.

· "Gold's moves are really mirroring the dollar at this point," said Tai Wong, head of base and precious metals derivatives trading at BMO. Gold is in a "restive" $1,890-$1,930 range with any dips to the bottom being lapped up, he added.

"The initial pop in gold (and slightly lower dollar) was due to the results of the last presidential debate not likely to make a difference in the election outcome, with (Democratic candidate Joe) Biden comfortably ahead."

· Denting appeal for greenback-denominated bullion, the dollar index pared some of its losses, but was set to decline about 1% for the week.

More than 50 million Americans have cast ballots with 11 days to go in the campaign.

· "Gold still remains stuck in its stimulus limbo range. Stimulus optimism faded after National Economic Council Director (Larry) Kudlow noted that negotiations still have policy and numerical disagreements," Edward Moya, senior market analyst at OANDA, said in a note.

"Gold's fate will be determined on Election Day, a blue wave signals huge stimulus and hello $2,000, while a Biden victory with the Republicans keeping the Senate suggests a slower grind higher," Moya said.

· Kudlow said on Thursday talks on a possible aid deal were ongoing but that larger policy differences with Democrats were unlikely to be resolved with the election less than two weeks away.

· Balance to risks tilted to the upside

''Moving forward, with all eyes still firmly on the election, gold bugs need not look too far on the horizon for new fiscal stimulus, which keeps the balance of risks still firmly tilted to the upside in precious metals,'' analysts at TD Securities argued.

''While, a potential Blue Wave fuels bullish gold expectations via a lower dollar, as more stimulus fuels a global reflationary wave, the upside could take longer to materialize as it also adds fuel to the bear steepening in the Treasury curve.''

· Central banks net sellers of gold owing to pandemic, says Refinitiv

Central banks shifted to net sellers for the first time in nearly a decade, with net sales estimated at just under 13 t for the third quarter, research from financial markets data company Refinitiv shows.

The shift was driven by an absence of purchases from Russia and China, as well as a significant rise in gross sales as countries continued the battle against Covid-19, which has taken a severe toll on the global economy, "with perhaps some also taking advantage of gold’s exceptional price performance in recent months", Refinitiv states.

Physical gold demand fell by 30% year-on-year, to 562 t in the third quarter as record high gold prices continued to take its toll on consumption.

· Silver dipped 0.8% to $24.55 per ounce but was set for a weekly rise. Platinum gained 2% to $904.36 and palladium rose 0.6% to $2,389.07.

· Pelosi, Trump trade blame on COVID-19 stimulus talks; Senate Republicans on sidelines

U.S. House Speaker Nancy Pelosi said on Friday it still was possible to get another round of COVID-19 aid before the Nov. 3 general election, but that it was up to President Donald Trump to act, including bringing along reluctant Senate Republicans.

“Now we’re talking and we’ll see what happens but at this moment I would say that I actually think Nancy would rather wait ‘til after the election,” Trump told reporters in an Oval Office appearance together with Mnuchin.

“If she wants to compromise, there will be a deal,” Mnuchin said.

· Biden the winner of final debate, TV viewers and undecided voters say

The CNN poll found it was perceived as a slightly weaker performance compared to the first, chaotic presidential debate last month, when 60% of viewers perceived Biden as the winner, compared to 53% on Thursday night.

· U.S. Jobless Claims Fell to 787,000 Last Week

Applications for unemployment benefits so far this month hit the lowest levels since March

Weekly initial claims for jobless benefits, a proxy for layoffs, fell by 55,000 to a seasonally adjusted 787,000 in the week ended Oct. 17, the Labor Department said Thursday. Claims for the prior two weeks were revised lower, reflecting new data from California. The revised level of claims for the week ended Oct. 3—767,000—was the lowest since the March 14 week, when less than 300,000 new claims were filed.

Declining layoffs add to indicators the economy is continuing to heal from the pandemic downturn. The National Association of Realtors reported Thursday that existing-home sales rose 9.4% in September to the highest level since 2006, and consumer spending rose last month, despite historically high unemployment.

Still, with millions out of work and concerns about a resurgence of the virus in many parts of the country, many economists expect the pace of economic recovery to slow.

· FDA approves Gilead’s remdesivir as a coronavirus treatment

The U.S. Food and Drug Administration approved Gilead Sciences’ remdesivir as a coronavirus treatment, CNBC’s Berkeley Lovelace reports, making it the first drug to receive the blanket green light.

The treatment had previously received emergency use authorization, and was among the earliest to be put in use in hospitalized patients.

· CORONAVIRUS UPDATES:

Global cases: 43.32M
Global deaths: 1.15M

U.S. cases: 8.88M
U.S. deaths: 230,507

· White House chief Meadows says ‘we’re not going to control the pandemic’ after coronavirus cases hit record high

White House chief of staff Mark Meadows said on Sunday that the U.S. will not get control of the coronavirus pandemic as the country reports a record high in new daily Covid-19 cases.

“We’re not going to control the pandemic,” Meadows said during an interview on CNN. “We are going to control the fact that we get vaccines, therapeutics and other mitigations.”

· Mike Pence will not quarantine after four aides test positive for coronavirus

· WHO says some countries ‘are on a dangerous track’ as Covid cases begin to stress health systems

· As millionth case looms, COVID tears through France faster than in spring

The coronavirus is spreading through France faster than at the peak of the first wave in spring, a government scientific advisor said on Friday, in one of the starkest alerts yet about the scale of the resurgence engulfing Europe.

France reported 41,622 new COVID-19 cases on Thursday, a new daily record, and will break through the 1,000,000 cumulative tally on Friday - a grim milestone for the government as it and other European capitals battle to keep their economies open.

The warning from epidemiologist Arnaud Fontanet came as the country’s finance minister said the economy was likely to shrink again in the fourth quarter as a result of the nightly curfews and other restrictions imposed to tame the virus.

“The virus is circulating more quickly than in the spring,” Fontanet, who sits on the Scientific Council advising the government on its COVID response, told BFM TV.

· Spain orders nationwide curfew to stem worsening coronavirus outbreak

· Asia becomes second region to exceed 10 million coronavirus cases

Asia surpassed 10 million infections of the new coronavirus on Saturday, the second-heaviest regional toll in the world, according to a Reuters tally, as cases continue to mount in India despite a slowdown and sharp declines elsewhere.

· North Korea says China dust could spread COVID-19, warns people to stay inside

North Korea has warned its citizens to stay indoors, saying seasonal yellow dust blowing in from China might carry the new coronavirus into the country.

· Euro zone business activity shrinks once more as Covid second wave surges

Economic activity in the euro zone shrunk in October as coronavirus restrictions returned to the region, preliminary data showed on Friday.

The flash euro zone PMI composite output index, which looks at activity in both manufacturing and services sectors, dropped to a four-month low in October to 49.4, versus 50.4 in September. A reading below 50represents a contraction in activity.

The latest figures showed that manufacturing has remained somewhat resilient over the last month, but activity in services has fallen to a five-month low.

“The euro zone is at increased risk of falling into a double-dip downturn as a second wave of virus infections led to a renewed fall in business activity in October,” Chris Williamson, chief business economist at IHS Markit, said in a statement.

· Singapore’s third-quarter office rents fell the most in 11 years due to Covid-19

Covid-19 pandemic hit leasing demand for commercial real estate in the regional business hub.

Rents for office space fell 4.5% on a quarterly basis in July-September, data from the Urban Redevelopment Authority showed. That was the biggest quarterly decline since the April-June period in 2009, when rents fell by 7.7%

· Japan mulls $95.5 billion extra budget to counter coronavirus: media

Japan’s government is considering compiling an extra budget worth around $95.5 billion to offset the economic drag caused by the coronavirus pandemic, the Mainichi newspaper reported on Saturday.

The government is likely to debate using the 10 trillion yen ($95.52 billion) budget to extend a labour subsidy programme scheduled to end in December and to pay for the distribution of a coronavirus vaccine, the Mainichi reported, without citing sources.

· China will improve yuan flexibility, central bank governor says

China will seek to improve the flexibility of its yuan currency and will reduce restrictions on cross-border use of the yuan, the country’s central bank governor Yi Gang said on Saturday.

Yi said such moves were needed to promote the opening of the country’s financial services industry. He was speaking at the Bund Summit conference held in Shanghai.

· China’s top leaders meet this week to plan for the next five years.

Chinese President Xi Jinping is about to deepen his mark on what could soon be the world’s largest economy.

The central committee of China’s ruling Communist Party, led by Xi, is set to meet in Beijing from Oct. 26 to 29 to discuss a proposal for national development for the next five years — from 2021 to 2025.

The government sets these economic and social priorities every five years — this year’s discussion is the 14th such plan.

With the global turbulence caused by the coronavirus pandemic and rising U.S.-China tensions, the meeting will be launched at a particularly critical time for the Asian nation. Economists predict the country will firmly become the world’s largest economy in the next few years.

· U.S. sanctions Russian institute linked to dangerous malware

Washington imposed sanctions on Friday on a Russian research institute tied to the development of a dangerous computer program capable of causing catastrophic industrial damage, a move that Russia called illegitimate.

· In Asia next week, Pompeo expected to bolster allies against China

U.S. Secretary of State of Mike Pompeo is flying to India next week to strengthen strategic ties with a nation that is locked in a military standoff with China, in Washington’s latest effort to bolster allies against Beijing.

· Tensions remain high in Thailand, as protesters’ deadline for leader to step down nears

Thailand’s government and the country’s pro-democracy movement appeared no closer to resolving their differences Saturday, as the protesters’ evening deadline for Prime Minister Prayuth Chan-ocha to step down approached.

Prayuth’s office issued a statement repeating his plea to resolve differences through Parliament, which will discuss the political situation in a special session starting Monday.

Reference: MiningWeek, FXStreet, Reuters, CNBC, Worldometers, CNN, Worldometers, AP, Wall Street Journal