Gold Drops Near Two-week Low As Dollar Rebounds

“They (central banks) are in a wait and see mode and it has tempered the expectations of gold bulls,” said Michael Hewson, chief market analyst at CMC Markets UK.

It is unlikely that we’ll get any clarity on how the Fed is going to arrive at its inflation targets and on monetary policy until at least the end of the U.S. election, he added.

Gold’s decline on Monday came despite European shares dropping to a 2-week low as surging COVID-19 cases in Europe prompted renewed lockdown measures in some countries and clouded the recovery outlook.

“The U.S. elections in early November certainly pose a major event risk on gold’s trajectory. Should risk aversion creep up over the coming six weeks, that may translate into upward pressure for bullion prices in the interim,” FXTM’s Tan noted.