Gold set for best close in seven weeks as Trump signs stimulus

GOLD headed for the highest close in seven weeks after President Donald Trump signed a US$900 billion coronavirus stimulus package, pumping more state funds into the world's top economy. Silver surged.

The haven built on a run of four weekly gains following the breakthrough on the package, which Mr Trump had initially declined to endorse amid a dispute on the size of checks to support households amid the pandemic. The dollar eased.

Bullion is set to post the first monthly gain since July after a run of losses prompted by the development of effective coronavirus vaccines. Over 2020 as a whole, gold has benefited from a steady weakening of the US currency since it peaked in March, as well as from unprecendented fiscal and monetary stimulus.

Spot gold rose as much as 0.7 per cent to US$1,896.70 an ounce, and traded at US$1,894.02 at 9:25am in Singapore. That would be the highest close since Nov. 6. Silver for immediate delivery rallied as much as 3.6 per cent to US$26.7601 an ounce. The Bloomberg Dollar Spot Index fell as much as 0.2 per cent.

The relief package will likely be the last major legislation signed by Mr Trump, whose re-election hopes were dashed in large part due to his handling of the pandemic. President-elect Joe Biden has said he will push for even more stimulus after taking office early next year.

BLOOMBERG