Gold On Track For Weekly Gain As U.S. Stimulus Hopes Dent Dollar

News18
·2 min read

Gold prices firmed on Friday, set for their first weekly gain in four, as growing optimism over a U.S. fiscal stimulus deal pressured the dollar and boosted the metal’s appeal as an inflation hedge.

Spot gold rose 0.2 % to $1,843.99 per ounce by 0310 GMT. U.S. gold futures were up 0.4% at $1,847.90.

Gold has added over 3% so far this week.

“Upward momentum (in gold) is strong partly because of a weakening dollar and prices have been technically oversold, so its also a technical rebound,” said Margaret Yang, a strategist at DailyFX, adding that the metal could find strong support at $1,800 and $1,750.

Yang, however, warned there could be downside risks if economic recovery quickens and inflation overshoots, prompting the U.S. Federal Reserve to hold back on monetary stimulus that could strengthen the dollar.

The U.S. dollar eased on Friday and was set for its worst week since early November, making gold cheaper for other currency holders.

A bipartisan, $908 billion coronavirus aid plan gained momentum in the U.S. Congress on Thursday as conservative lawmakers expressed their support.

Also supporting gold was news that drugmaker Pfizer slashed its target for the rollout of its COVID-19 vaccine on supply disruptions.

“Most of the bullish drivers that led to the 2020 rally will increasingly fade, reducing the likelihood for renewed significant price upside,” Fitch Solutions said in a note, forecasting gold to average $1,850 per ounce next year.

Investors are awaiting U.S. non-farm payrolls data due at 1330 GMT for further clues on the pace of the economic recovery.

Silver rose 0.1% to $24.09 per ounce and was set to climb 6% in the week. Platinum gained 1.3% to $1,043.19 and palladium was up 1.2% at $2,328.82.

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