Gold Rate Firms Near $1,900 Mark On Stimulus Hopes, Weak Dollar

US gold futures were 0.3% higher at $1,901.70 per ounce

Gold rose close to the $1,900 mark on Thursday, boosted by an easing dollar and increased investor confidence that there will be further US fiscal stimulus measures to aid the virus-beaten economy.

Spot gold rose 0.6 per cent to $1,896.78 per ounce by 1002 GMT (3:32 pm in India), having ended September 4.3 per cent lower, in its biggest monthly drop since November 2016.

US gold futures were 0.3 per cent higher at $1,901.70 per ounce.

On Wednesday, US Treasury Secretary Steven Mnuchin said talks with House Speaker Nancy Pelosi “made a lot of progress” on the long-awaited COVID-19 relief legislation.

StoneX analyst Rhona O’Connell said uncertainty over the outcome of the US Presidential election remained a supportive factor longer term, but negotiations over stimulus between Pelosi and Mnuchin were likely to influence trade more in the short term.

Regardless of the election outcome, “there will still likely be wrangling over fiscal stimulus to try and maintain financial stability… I think there will be decently sized stimulus anyway, but the political nuances will stay,” she said.

Gold is often viewed as a hedge against inflation and currency debasement.

Hopes for the passage of a long-awaited fiscal stimulus package in the US and strong labour and manufacturing data gave a boost to risk sentiment and pushed the dollar to a one-week low.

A weaker dollar makes bullion cheaper for investors who hold other currencies.

Market participants await US initial jobless claims data due later on Thursday and a non-farm payrolls report on Friday for clues about the pace of recovery in the world’s largest economy.

If US jobs data is at least in line with expectations and as long as the wage inflation number is strong, that may be gold negative, said DailyFx currency strategist Ilya Spivak.

Among other precious metals, silver rose 2.2 per cent to $23.71 per ounce. Platinum hit a more than one-week high of $908.50 per ounce and was last up 1.2% at $898.66, while palladium fell 0.2 per cent to $2,300.90.



Source link

By admin

Leave a Reply