December 07, 2020
Gold steadies as U.S. stimulus bets outweigh vaccine hopes
(Reuters) - Gold prices steadied on Monday as grim U.S. jobs data bolstered hopes for more fiscal stimulus, although optimism around coronavirus vaccine rollouts kept gains in check.
Spot gold prices were steady at $1,837.04 per ounce, while U.S. gold futures were little changed
"Softer jobs growth and tighter social mobility restrictions ostensibly lower the hurdle for a policy response from (U.S.) Congress," said Stephen Innes, chief global market strategist at financial services firm Axi.
Data on Friday showed the U.S. economy added the fewest workers in six months in November.
Talks aimed at reaching a fresh pandemic relief package gathered momentum on Friday, as a bipartisan group of U.S. lawmakers worked to put the finishing touches on a new $908 billion bill.
While the gold market might be disappointed with the size of the stimulus package, markets will likely take support from the bipartisan nature of the deal that suggests further compromise in the U.S Congress ahead, Innes said.
Gold tends to benefit from stimulus measures as it raises the prospect of inflation, against which bullion is used as a hedge.
Raising geopolitical uncertainty, the United States is preparing to impose sanctions on at least a dozen Chinese officials, according to sources familiar with the matter.
However, gold's gains were capped as Britain prepared to become the first country to roll out the Pfizer/BioNTech COVID-19 vaccine this week.
Although the vaccine news is perceived to be bearish for gold, it is not going to stop governments from pursuing easier monetary and fiscal policies, said ED&F Man Capital Markets analyst Edward Meir in a note.
Silver fell 0.6% to $24.03 per ounce and platinum slipped 1.9% to $1,034.29, while palladium gained 0.3% to $2,350.49.