December 18, 2020
Gold dips as dollar rebounds, but set for a third weekly gain
(Reuters) - Gold prices retreated on Friday after rising sharply for the past three sessions as the dollar
rebounded, but the metal was on track to post a third straight weekly gain on stimulus hopes in the United States.
Spot gold fell 0.3% to $1,880.20 per ounce. For the week, it was up 2.3% so far. U.S. gold futures
dropped 0.3% to $1,885.30.
"The U.S fiscal stimulus is more or less priced in... so traders are trying to lock in profits before the weekend," said Margaret Yang, a strategist at DailyFX.
Meanwhile, U.S. Congressional Republicans and Democrats scrambled to pass a new round of coronavirus aid on Thursday with lawmakers from both parties saying that failure to agree was no longer an option.
The U.S. dollar rose 0.2%, just above a more than two-year trough, lowering gold's appeal to other currency holders.
A break above the $1,892 area with support from a dovish U.S Federal Reserve and a weaker dollar could signal further upside with resistance at $1,910 ahead, Yang said.
Analysts also said gold would find support from the Fed's promise to continue its bond-buying programme until "substantial further progress" is seen in restoring full employment and hitting its 2% inflation target.
There's a lot of expectation getting built into gold prices, but with both the U.S. government and the Fed making the right noises about further stimulus and support for the economy, gold could climb above $1,900 by year-end, said Michael Langford, director at corporate advisory AirGuide.
Denting sentiment for gold further, advisers to a U.S. regulator overwhelmingly endorsed emergency use of Moderna Inc's coronavirus vaccine.
Silver fell 0.9% to $25.82 an ounce. Platinum dropped 0.9% to $1,034.50 and palladium eased 0.3% to $2,334.53, but was up 0.7% in the week.