Gold climbed more than 1% on Friday as the dollar retreated to a near three-week low and increased bets for fresh U.S. stimulus pushed investors to bullion as a hedge against likely inflation.
Spot gold rose 1.4% to $1,919.36 per ounce by 12:03 pm EDT (1603 GMT), en route to a second straight weekly gain, of about 1.2%. U.S. gold futures gained 1.6% to $1,925.
“It seems like a lot of optimism is being built around it (U.S. stimulus)” and “that’s really at the forefront” of gold’s move, said Eli Tesfaye, senior market strategist at RJO Futures.
A further drop in the dollar could add more fuel, and given the strong technical momentum, bullion could soon hit highs seen in August, Tesfaye added.
After stalling talks with Democrats on a comprehensive aid package earlier this week, U.S. President Donald Trump called for a “skinny” relief bill that would include a bailout of the struggling airline sector.
Additionally, a widening lead for Democratic presidential candidate Joe Biden has raised the prospect of further stimulus, adding to gold’s allure.
The dollar meanwhile slid as expectations grew for a Biden win, making gold cheaper for those holding other currencies.
“In fact, the long gold trade is likely agnostic to the election outcome,” TD Securities analysts said in a note.
“Barring a split government outcome, both administrations are likely to push through a large-scale fiscal deal in no time that would help de-bottleneck the real rate suppression, lifting precious metals in the process.”
Near-zero interest rates and unprecedented money printing by central banks to ease the economic blow from the coronavirus pandemic have driven a 26% rally for gold this year.
Silver jumped 3.4% to $24.63 per ounce and is up more than 4% so far this week. Platinum rose 2.7% to $885.55 and palladium climbed 3.3% to $2,450.95.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor
Read all the Latest News and Breaking News here
Comments
0 comment