Gold prices on Monday ended higher to start the week, with talk of a last-ditch effort to strike a deal by U.S. lawmakers on a fresh round of fiscal relief before the 2020 presidential elections helping to drive buying appetite, experts said.
A weaker dollar also provided support for bullion because weakness for the buck can draw interest in gold from buyers using currencies that are relatively weaker than the buck.
With fresh hope for a U.S. stimulus, positive vaccine news from the UK and noted weakness in the dollar, the “path of least resistance in the gold and silver markets is pointing upward,” said analysts at Zaner Metals in a Monday note.
“Furthermore, gold and silver should draft support from favorable Chinese economic news which showed better-than-expected retail sales and an overall growth level commensurate with pre-Covid-19 levels,” they said.
Against that backdrop, December gold GOLD, -0.32% GCZ20, +0.16% rose $5.30, or 0.3%, to settle at $1,911.70 an ounce, after bullion posted a 1% weekly decline on Friday, based on the most-active contract, according to FactSet data.
Silver for December delivery SI00, +0.96% SIZ20, +0.96%, meanwhile, added 29 cents, or 1.2%, to reach $24.698 an ounce, following a weekly slide of 2.8%.
Investors have been attuned to the back-and-forth negotiations between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on a new round of funds for American businesses and workers hard hit by the economic weakness caused by the COVID-19 pandemic.
Pelosi spoke on Saturday with Mnuchin, according to reports, but appeared to suggest that a deal before the 2020 presidential election, between President Donald Trump and Democratic challenger and former Vice President Joe Biden, was unlikely to be achieved if a fiscal deal isn’t struck soon.
Additional relief, should it come, is viewed as bullish for gold which is being used by some as a hedge against governments dialing up spending and lowering interest rates to combat the pandemic that has seen more than 40 million people infected across the globe, according to data aggregated by Johns Hopkins University.
Meanwhile, China’s gross domestic product on Monday was seen expanding by 4.9% in the third quarter from a year earlier, below economists’ average estimates but above levels the nation saw before the viral outbreak took hold late in 2019.
China is one of the world’s biggest importers of commodities and an avid buyer of precious metals like gold.
Meanwhile, weakness in the dollar was providing an added boost to dollar-priced silver and gold. The dollar on Monday was down 0.4% on Monday at 93.315, as gauged by the ICE U.S. Dollar Index DXY, -0.37%.
Among other metals traded on Comex, December copper HGZ20, +0.60% settled at $3.086 a pound, up 0.6%. January platinum PLF21, -0.79% fell by 0.7% to $863.50 an ounce, while December palladium PAZ20, +0.62% tacked on about 0.7% to $2,357.50 an ounce.
Add Comment