2020.10.0618:23:00UTC+00Gold Futures Settle Lower

Gold prices came off two-week highs and settled lower on Tuesday as traders made cautious moves while keeping a close watch on developments with regard to a potential new coronavirus relief package.

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke by phone for about an hour about coronavirus relief on Monday, but emerged without an agreement.

They are expected to talk again today, continuing a recent flurry of activity working towards a deal on legislation.

Risk sentiment improved after the U.S. President Donald Trump's discharge from hospital eased political uncertainty. However, gold's downside was limited as worries about growth remained due to the continued surge in new coronavirus cases across the globe.

The dollar index recovered after a fall from near the flat line. The index, which dropped to 93.34, was last seen at 93.51, its previous close.

Gold futures for December ended down $11.30 or about 0.6% at $1,908.80 an ounce, after having advanced to $1,927.00 earlier in the session.

Silver futures for December closed lower by $0.639 or about 2.6% at $23.921 an ounce, while Copper futures for December edged up $0.0025 or 0.02% to $2.9635 per pound.

Federal Reserve Chairman Jerome Powell said during his speech at the National Association for Business Economics today that the U.S. economic recovery U.S. economic recovery remained far from complete and the economy needs more fiscal support.

"The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods."

Global trade volume is likely to fall less than earlier estimated this year, and the expected rebound next year will not return it to pre-crisis levels, the World Trade Organization said Tuesday, as it warned of downside risks from a resurgence of coronavirus infections over the coming months.

The volume of world merchandise trade is set to decline 9.2% this year, which is much less than the 12.9% slump predicted in an optimistic scenario in April.

Next year, merchandise trade volume is expected to grow 7.2%, but remain well below the pre-crisis level. The latest forecast is more pessimistic than the robust 21.3% rebound predicted earlier.