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Gold on track for weekly gain as US stimulus hopes dent dollar
[BENGALURU] Gold prices firmed on Friday, set for their first weekly gain in four, as growing optimism over a US fiscal stimulus deal pressured the dollar and boosted the metal's appeal as an inflation hedge.
Spot gold rose 0.2 per cent to US$1,843.99 per ounce by 3.10am GMT. US gold futures were up 0.4 per cent at US$1,847.90.
Gold has added over 3 per cent so far this week.
"Upward momentum (in gold) is strong partly because of a weakening dollar and prices have been technically oversold, so its also a technical rebound," said Margaret Yang, a strategist at DailyFX, adding that the metal could find strong support at US$1,800 and US$1,750.
Ms Yang, however, warned there could be downside risks if economic recovery quickens and inflation overshoots, prompting the US Federal Reserve to hold back on monetary stimulus that could strengthen the dollar.
The US dollar eased on Friday and was set for its worst week since early November, making gold cheaper for other currency holders.
A bipartisan, US$908 billion coronavirus aid plan gained momentum in the US Congress on Thursday as conservative lawmakers expressed their support.
Also supporting gold was news that drugmaker Pfizer slashed its target for the rollout of its Covid-19 vaccine on supply disruptions.
"Most of the bullish drivers that led to the 2020 rally will increasingly fade, reducing the likelihood for renewed significant price upside," Fitch Solutions said in a note, forecasting gold to average US$1,850 per ounce next year.
Investors are awaiting US non-farm payrolls data due at 1.30pm GMT for further clues on the pace of the economic recovery.
Silver rose 0.1 per cent to US$24.09 per ounce and was set to climb 6 per cent in the week. Platinum gained 1.3 per cent to US$1,043.19 and palladium was up 1.2 per cent at US$2,328.82.