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Gold rises as softer dollar, stimulus hopes outweigh vaccine optimism

Category: Economy

Date: 2020-11-23T08:23:04+0000
Gold rises as softer dollar, stimulus hopes outweigh vaccine optimism

Shafaq News/ (Reuters) Gold climbed higher on Monday, as a softer dollar and hopes of further U.S. monetary stimulus to cushion the pandemic-hit economy offset optimism over the possibility of a COVID-19 vaccine rollout next month.

Spot gold rose 0.2% to $1,873.51 per ounce by 0510 GMT and U.S. gold futures were little changed at $1,871.70.

U.S. Treasury Secretary Steven Mnuchin on Friday reassured markets that the Fed and Treasury had many tools left to support the economy, after deciding to de-fund several Federal Reserve lending programs by the end of the year.

"Ironically, the failure to deliver a fiscal package is supportive for gold," said Michael McCarthy, chief strategist at CMC Markets, noting there might be more reliance on Fed support likely in the form of liquidity and lower interest rates as a result.

Non-yielding gold is often seen as a hedge against inflation that is likely to result from stimulus measures.

Also lending support to bullion was a softer U.S. dollar that reduced the cost of purchasing it to other currency holders.

News that U.S. healthcare workers could start getting COVID-19 inoculation shots within a day or two of regulatory consent next month helped push broad index of Asian equities to record highs.

Investors may be less inclined to chase prices higher and patiently wait for dips opportunities as interest rates will likely remain low and the dollar weaker next year, said Avtar Sandu, senior commodities manager at Phillip Futures.

On the technical front, gold may retest support at $1,855 per ounce, a break below which could cause a fall to $1,841, according to Reuters technical analyst Wang Tao.

Silver firmed 0.5% to $24.25 an ounce. Platinum rose 0.1% to $946.43, while palladium gained 0.6% to $2,339.56.

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