Gold dips as dollar ticks up; set for best week in nearly two months
[BENGALURU] Gold was headed on Friday for its best weekly gain in nearly two months, despite prices slipping from a more than one-week high as the dollar strengthened amid doubts regarding the US stimulus package.
Spot gold was down 0.7 per cent at US$1,892.06 per ounce by 0306 GMT, after rising 1 per cent to a one-and-a-half-week high of US$1,911.66 in the previous session. US gold futures dropped 1 per cent to US$1,898.
However, bullion has gained 1.8 per cent this week, its biggest weekly percentage rise since the week ended Aug 7.
"There was increased optimism about the stimulus talks, but late in the day that optimism fell away and as a result the dollar rallied a bit and we are seeing a retreat in gold," said Edward Meir, an analyst at ED&F Man Capital Markets.
The dollar index rose 0.2 per cent against its rivals, making gold more expensive for holders of other currencies.
The US House of Representatives approved a US$2.2 trillion Democratic plan to provide more economic relief from the Covid-19 pandemic, as a bipartisan deal continued to elude House Speaker Nancy Pelosi and the White House.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The deteriorating short-term technical picture and lack of current monetary stimulus to boost precious metals remain a concern to gold bulls, said Avtar Sandu, a senior commodities manager at Phillip Futures in a note.
Gold tends to benefit from widespread stimulus measures as it is widely viewed as a hedge against inflation.
Data on Thursday showed the number of Americans filing new claims for jobless benefits remained at recession levels, while personal income dropped in August, underscoring the need for another government rescue package.
Investors focus now shifts to US non-payroll figures due out at 1230 GMT for the latest indication of how the coronavirus-hit economy is faring.
Elsewhere, silver fell 1.4 per cent to US$23.56 per ounce, but was up 3 per cent for the week. Platinum slipped 1 per cent to US$887.78 and palladium eased 0.2 per cent to US$2,309.97.
REUTERS
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Energy & Commodities
Seatrium unit to fully redeem S$500 million worth of floating-rate bonds early
Anglo rejects BHP takeover bid as significantly undervalued
India rice prices at three-month low on shrinking demand
Gold prices set for weekly decline ahead of US inflation data
Pricey coffee is here to stay as hoarding, heat hit Vietnam supply
Oil settles higher as weak US economic growth offset by supply concerns