Gold firms as dollar continues slide
Gold prices extended gains on Thursday as the dollar fell to a 2-1/2 year low while investors grew optimistic of an eventual breakthrough in negotiations over a fresh US coronavirus aid package.
Spot gold rose 0.3% to $1,837.10 per ounce by 1014 GMT, having earlier hit its highest since Nov. 23 at $1,843.11. US gold futures were up 0.6% at $1,840.70.
“The dollar has been losing ground especially versus the euro, pushing gold prices higher,” said Julius Baer analyst Carsten Menke.
“It’s not your typical safe haven demand because there is broad based economic optimism at the moment related to the vaccine situation.”
Hopes of a stimulus deal and optimism over vaccine progress pushed the US dollar to its lowest since April 2018, making bullion cheaper to holders of other currencies.
Although US lawmakers were unable to agree on a fresh relief package, early signs indicate that a $908 billion bipartisan proposal could be gaining traction as a negotiating tool.
On Wednesday Federal Reserve Chair Jerome Powell repeated his plea for Congress to provide more aid until a vaccine allows for a broader resumption of commerce.
Given the level of monetary debasement, gold could rise to $1,875-$1,880 in December, said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.
Gold, considered a hedge against inflation and currency debasement, has gained 21% this year, benefiting mainly from unprecedented stimulus unveiled to cushion the pandemic’s impact.
Elsewhere, platinum hit a near eleven-month peak at $1,027.75 per ounce. It was last up 1.1% at $1,025.66.
Platinum has consolidated above $1,000 on positive global growth sentiment, with initial targets extending towards $1,040 as ETF (Exchange Traded Fund) interest drives price action on the back of forecasted deficits in 2021, MKS PAMP said in a note.
Palladium rose 0.1% to $2,402.54 per ounce, while silver was flat at $24.10.
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- Medical staff in hospitals wore bulky personal protective equipment (PPE) for hours, leaving them dehydrated, exhausted and drenched in sweat.
- Several high-frequency indicators such as the Nomura India Business Resumption Index (NIBRI), Purchasing Managers’ Indices (PMI) show a strong sequential recovery in the economy.