Gold edges up as traders assess Brexit trade deal, US stimulus
Gold steadied and most base metals were higher in holiday-thinned trading, with investors assessing the latest developments of a virus-relief spending package in the US and the final announcement of a post-Brexit trade deal.
UK and European Union negotiators have finalized their historic post-Brexit trade agreement, averting the threat of an acrimonious breakup. House Republicans blocked Democrats’ attempt to meet President Donald Trump’s demand to pay most Americans $2,000 to help weather the coronavirus pandemic. Democrats will try again with a roll call vote on a new bill Dec. 28.
“Gold prices are benefiting from a Brexit trade deal breakthrough that paved the way for a weaker dollar,” said Edward Moya, a senior market analyst at Oanda Corp. The metal could see further gains if the US stimulus impasse is resolved, he said.
Investors are looking past Trump’s demand for changes to US pandemic relief, expecting that stimulus spending will come sooner or later. A gauge of the dollar retreated 0.1% after a 0.4% decline on Wednesday.
Spot gold edged up 0.3% at $1,877.82 an ounce at 10:04 am in New York. Prices are up nearly 24% this year, on course for the biggest annual gain in a decade. Aluminum led gains among most base metals, rising as much as 1.4%, while copper fell 0.4%.
The LME’s index of base metals reached a seven-year high last week, driven by prospects of a new long-term bull market for commodities as economies recover from the coronavirus crisis.