Gold gains 1% on dollar retreat, US stimulus hopes
[BENGALURU] Gold prices rose 1 per cent on Friday due to a weaker US dollar and was headed for a second straight weekly gain, with the metal's appeal as an inflation hedge bolstered by renewed optimism over a new US coronavirus relief package.
Spot gold rose 0.7 per cent to US$1,907.16 per ounce by 6.31am GMT. It was up 0.4 per cent for the week.
US gold futures were up 1 per cent at US$1,912.40.
The dollar index dropped against rivals, en route to a second straight weekly fall.
"With renewed hopes for another fiscal stimulus, we saw the dollar decline, inflation expectations pick up and risk returning to the table. All these factors are pushing gold higher," said Howie Lee, an economist at OCBC Bank.
Talks resumed between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin over the coronavirus aid plan.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
A widening lead for Democratic presidential candidate Joe Biden was also seen as opening the way for a big economic stimulus.
Gold, considered a hedge against inflation and currency debasement, has gained nearly 26 per cent this year, boosted by unprecedented stimulus globally to cushion the pandemic's economic impact.
"Should spot gold be able to notch a higher high past the US$1,920 resistance level, that should confirm its recent uptrend over the past fortnight and assure its grip on the US$1,900 handle for the near future, provided dollar doesn't throw a wrench into the works," said FXTM market analyst Han Tan.
Mirroring the metal's appeal, gold-backed exchange traded funds added more than 1,000 tonnes of bullion worth US$60 billion to their stockpile in the first nine months of 2020, the World Gold Council said on Thursday.
Silver rose 1.5 per cent to US$24.17 per ounce and was up 2 per cent for the week. Platinum gained 1.5 per cent to US$875.33 and palladium was 0.5 per cent higher at US$2,383.16.
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
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
India's Vedanta misses Q4 profit estimates on lower prices
BHP targets Anglo American in bid valuing miner at US$39 billion
China's Sinopec charts global expansion with refinery in rival India's backyard