Gold edges higher on US stimulus hopes; set for worst week in six

[BENGALURU] Gold inched higher on Friday on renewed hopes of more US stimulus measures, though the bullion was on track for its biggest weekly decline in more than a month pressured by a stronger US dollar.

Spot gold rose 0.1 per cent to US$1,869.47 per ounce by 3.41am GMT. But on a weekly basis, prices are down 4.1 per cent so far.

US gold futures were down 0.4 per cent to US$1,870.30.

The dollar index was on track for its best week since early-April, up 1.5 per cent, making gold more expensive for holders of other currencies.

"The resurgence of the US dollar has been a headwind for all precious metals. Also weighing on the outlook for gold has been question marks on the next US stimulus package and whether or not there'll be an agreement there," said Lachlan Shaw, head of commodities research at National Australia Bank.

Democrats in the US House of Representatives are working on a US$2.2 trillion coronavirus stimulus package that could be voted on as soon as next week, a key lawmaker said on Thursday.

US Federal Reserve policymakers, including chair Jerome Powell, made multiple public appearances this week calling on the US government to provide more fiscal support.

Central banks worldwide have rolled out massive stimulus and slashed interest rates to near zero to counter the economic damage from the Covid-19 pandemic, helping gold, considered a hedge against political and economic uncertainties, climb over 20 per cent this year.

The number of Americans filing new claims for unemployment benefits unexpectedly increased last week, underpinning views that the economic recovery in the world's largest economy was running out of steam was.

Silver fell 0.6 per cent to US$23.07 per ounce and platinum rose 0.6 per cent to US$854.13. Both metals are on track for their worst week since mid-March.

Palladium edged 0.2 per cent higher to US$2,229.92 per ounce.

REUTERS