Gold rises despite Trump stimulus threat as dollar weakens
Shafaq News/ Gold prices rose on Wednesday, helped by a weaker dollar and as investors remained optimistic about a U.S. stimulus package even after President Donald Trump threatened not to sign the pandemic relief bill.
According to Reuters Data, Spot gold rose 0.4% to $1,867.47 per ounce by 0804 GMT, while U.S. gold futures were steady at $1,870.20.
The U.S. dollar fell 0.3% against major rivals, increasing gold's appeal for holders in other currencies.
Since the market has priced in a lot of pandemic-related uncertainty and the U.S. fiscal stimulus deal, gold will likely tread water in the coming weeks and any potential upside will come from new unknown uncertainties, said Michael Langford, director at corporate advisory Air Guide.
Gold's advance came despite Trump threatening on Tuesday to not sign a coronavirus relief bill, saying it should be amended to increase the amount on offer.
"Markets are hopeful the stimulus will be passed and that should support gold prices going ahead," said Jigar Trivedi, commodities analyst at Mumbai-based broker Anand Rathi Shares.
He added the metal could rally into 2021 with resistance near gold's record high of $2,072.5.
Raising concerns over a global economic recovery, a new coronavirus strain in Britain has forced several countries to shut their borders to the United Kingdom and drug makers to scramble to test their COVID-19 vaccines against it.
Gold will recover its historical relationship with real yields, and real yields will likely continue to fall so there is no reason to think gold cannot make another push for $2,000 next year if this trend prevails, said IG Market analyst Kyle Rodda.
Gold, seen as a hedge against inflation, benefits from low-interest rates that reduce its opportunity cost.
Silver rose 1.2% to $25.43 an ounce. Platinum gained 0.9% to $1,011.36 and palladium was up by 0.6% at$2,328.42.