scorecardresearch
Follow Us:
Monday, January 25, 2021

Gold set for third weekly gain as traders eye US fiscal support

Spot gold dipped 0.1% to $1,884.41 per ounce by 0531 GMT. For the week, it was up 2.4%. US gold futures slipped 0.1% to $1,889.40.

By: Reuters | December 18, 2020 12:09:18 pm
A pile of Sovereign gold coins in London, UK (Photographer: Chris Ratcliffe/Bloomberg)

Gold prices retreated on Friday as the dollar rebounded, after growing US stimulus hopes drove a three-day rally in bullion, putting the metal on course for a third consecutive weekly gain.

Spot gold dipped 0.1% to $1,884.41 per ounce by 0531 GMT. For the week, it was up 2.4%. US gold futures slipped 0.1% to $1,889.40.

“The US fiscal stimulus is more or less priced in … so traders are trying to lock in profit before the weekend,” said Margaret Yang, a strategist at DailyFX.

US Congressional Republicans and Democrats scrambled to pass a new round of coronavirus aid on Thursday with lawmakers from both parties saying that failure to reach an agreement was no longer an option.

While a stimulus deal could spur gold prices higher, a more sustained ascent would require signs of a significant pick-up in inflationary pressures, said FXTM market analyst Han Tan.

The US dollar rose 0.2%, just above a more than two-year trough, lowering gold’s appeal to other currency holders.

A break above the $1,892 area with support from a dovish US Federal Reserve and a weaker dollar could signal further upside with resistance at $1,910 ahead, Yang said.

Analysts also said gold would find support from the Fed’s promise to continue its bond-buying programme until “substantial further progress” is seen in restoring full employment and hitting its 2% inflation target.

There is a lot of expectation getting built into gold prices, but with both the US government and the US Fed making the right noises about further stimulus and support for the economy, gold could climb above $1,900 by year-end, said Michael Langford, director at corporate advisory AirGuide.

Silver slipped 1.1% to $25.77 an ounce. Platinum fell 1% to $1,033.67 and palladium rose 0.1% to $2,343.18 and was up 0.8% for the week.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.

Advertisement
Advertisement
Advertisement
Advertisement