Gold prices rose on Thursday as the dollar eased and investors bet on further U.S. stimulus though President Donald Trump threatened to veto a long-awaited pandemic relief bill.
Spot gold advanced 0.3% to $1,876.75 per ounce by 0518 GMT, having risen as much as 1% in the previous session. U.S. gold futures climbed 0.1% to $1,878.90.
“Gold prices are riding a near-term bull trend, propelled by a weaker dollar and a new strain of coronavirus that could derail the (economic) 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 trade deal lifted the euro and British pound, pushing the dollar down.
The safe-haven metal also benefited from the more contagious coronavirus variant that is raging in Britain and has prompted sweeping restrictions in the country.
“The overnight rally leaves gold parked in the middle of its one-week range, lacking the drivers and momentum to attempt a directional move either way,” Jeffrey Halley, a senior market analyst at OANDA, said in a note.
Gold’s next move will depend on whether the fiscal stimulus situation in the United States is resolved over the next week, he added.
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.
Gold will move in tandem with COVID-19 developments next year, while U.S. President-elect Joe Biden’s policy on the dollar and U.S.-China relations will also determine the metal’s trajectory, DailyFX’s Yang said.
The metal may test a resistance at $1,888 per ounce, a break above which could push it to $1,904, Reuters technical analyst Wang Tao said.
Silver climbed 1.1% to $25.81 an ounce and platinum gained 0.5% to $1,019.69, while palladium was steady at $2,322.57.
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