Gold jumped over 1% on Friday en route to a second straight weekly gain, as the dollar weakened and renewed negotiations for U.S. stimulus prompted investors to buy bullion as a hedge against inflation.
Spot gold rose 1% to $1,912.22 per ounce by 0945 GMT, up 0.7% so far this week. U.S. gold futures gained 1.2% to $1,917.90.
“The gyrations on whether we are going to get a stimulus or not seems to be affecting gold prices; gold has rallied on huge stimulus from the U.S. Federal Reserve and the government, and if that continues, it will support gold further,” said Robin Bhar, an independent analyst.
U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin resumed their talks over the coronavirus aid plan, after U.S. President Donald Trump called off negotiations earlier this week.
Bhar added, “investors who have a portfolio in equities, fixed income will also try to find ways of hedging the uncertainty on the economy and the stimulus.”
Gold, considered a hedge against inflation and currency debasement, has gained 26% this year, boosted by massive stimulus globally to cushion the pandemic’s economic impact.
The dollar fell against rivals, amid growing bets that Joe Biden would come out on top in the U.S. presidential elections and possibly offer more stimulus post that.
The prospect of a Democrat win boosts the incentive to hold gold as a new relief package can be built if the ongoing stimulus talks fall apart, said OANDA analyst Craig Erlam.
Meanwhile, gold-backed exchange traded funds added over 1,000 tonnes of bullion worth $60 billion to their stockpile in the first nine months of 2020, the World Gold Council said.
Silver rose 1.7% to $24.24 per ounce, up over 2% for the week. Platinum gained 1.6% to $875.80 and palladium climbed 1.3% to $2,401.99.
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