Gold steadied on Monday, after a retreat in the dollar helped it build on last week's gains but moves were muted with markets awaiting a U.S. presidential debate for pointers as to the outcome of November's election.
"The dollar is a bit weaker since this morning, but also the oil price is much higher and this is contributing to some uptrends in commodities in general," Commerzbank analyst Eugen Weinberg said, when gold prices were firm. The presidential debate is likely to be "very interesting" for gold, Weinberg said. "(More support) for Trump after the debate is likely to add to support for gold."
The dollar fell against the safe-haven yen on Monday after comments from a top Bank of Japan (BOJ) official reinforced views that the central bank was unable to weaken the yen, while an impending U.S. presidential debate stoked uncertainty.
Analysts said uncertainty over the impact of the U.S. presidential debate hurt the dollar. The dollar index .DXY, which measures the greenback against a basket of six major currencies, was last down 0.2 percent at 95.300.
On deck Monday evening is the first U.S. presidential debate between Hillary Clinton and Donald Trump. Some speculate this will be the most-watched television debate ever.
There is a sense outside of the U.S. that Trump is an unknown and potentially unpredictable, which could bring anxiety to some markets if it appears Trump has won the debate, or down the road appears to have a good chance to become the next U.S. president. Many reckon that markets worldwide will now start to pay much closer attention to the U.S. presidential race heading up to the early-November election.
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