You are here
Gold eyes best week since July on easing US dollar, elections
[BENGALURU] Gold rose on Friday and was set to post its best week since July as the US dollar weakened and increasing chances of a Joe Biden victory in the US presidential election boosted hopes for a larger coronavirus relief bill.
Spot gold rose 0.2 per cent to US$1,951.51 per ounce by 1.41pm EST (1841 GMT), on track for a 3.9 per cent weekly gain, the most since late July. US gold futures settled up 0.3 per cent at US$1,951.70.
"A devaluation of the US dollar has driven gold prices to six-week highs, also some safe-haven demand amid the uncertainty of the presidential elections and rising Covid cases," Kitco Metals senior analyst Jim Wyckoff said.
"The market is factoring in a Biden victory, (which) will lead to more government stimulus programmes and that could introduce some problematic price inflation down the road and also deflate the value of (the) dollar."
Gold, considered a hedge against inflation and currency debasement, has risen 28 per cent this year on the back of massive global stimulus to help coronavirus-hit economies.
Making gold cheaper for holders of other currencies, the US dollar held near a two-month low.
Democrat Joe Biden edged closer to the White House, while Republican President Donald Trump falsely claimed the election was being "stolen" from him, even as votes were still being counted in key states.
"Although the continued US election uncertainty is taking away the prospect of an immediate stimulus package, markets believe that one would eventually be coming, and so that may be why gold is moving up," ED&F Man Capital Markets analyst Edward Meir said.
"We have a decent shot of getting to US$2,000 an ounce by month-end if not earlier." Data earlier showed US nonfarm payrolls increased by 638,000 jobs last month, while the unemployment rate fell to 6.9 per cent from 7.9 per cent in September.
Silver gained 0.8 per cent to US$25.51 an ounce. Platinum was unchanged at US$893.06 and palladium jumped 4.5 per cent at US$2,484.06.