Gold prices gained on Thursday, supported by a weaker dollar as investors bet on further U.S. stimulus following dour economic data even as President Donald Trump threatened to veto a long-awaited pandemic relief bill.
Spot gold rose 0.2% to $1,875.61 per ounce by 0316 GMT. U.S. gold futures rose 0.2% to $1,881.20.
“Gold prices are riding a near-term bull trend, propelled by a weaker dollar and a new strain of coronavirus that could derail the recovery, hinting at further stimulus ahead,” said Margaret Yang, a strategist at DailyFX.
News that Britain and the European Union appeared close to clinching a long-elusive trade deal on Wednesday lifted the Euro and British pound, pushing down the dollar.[USD/]
Safe-haven gold has also benefited from the spread of a more contagious variant of the virus in Britain that has forced the country to impose sweeping restrictions.
The rising risks from the new virus variant and surging U.S. infections have kept investors optimistic about the U.S. stimulus bill despite Trump’s threat to veto the $900 billion relief package.
Underscoring the economic hit from the pandemic, data on Wednesday showed elevated U.S. jobless claims and a drop in consumer spending for the first time since May in November.
Gold is considered as a hedge against inflation and monetary debasement.
Gold prices will move in tandem with COVID-19 developments next year, while President-elect Joe Biden’s policy on the dollar and Sino-U.S. relations will also determine the metal’s trajectory, DailyFX’s Yang said.
On the technical front, gold may test a resistance at $1,888 per ounce, a break above which could lead to a gain to $1,904, Reuters technical analyst Wang Tao said.
Silver climbed 0.6% to $25.69 an ounce. Platinum gained 0.3% to $1,017.43 and palladium rose 0.4% to $2,333.60.
Most markets will be closed on Friday for Christmas.
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