October 23, 2020
Gold up on U.S. stimulus optimism; strong dollar caps gains
(Reuters) - Gold edged up on Friday on hopes that a U.S. stimulus package would eventually be passed, boosting the metal’s appeal as an inflation hedge, although a stronger dollar capped gains.
Spot gold rose 0.1% to $1,906.29 per ounce, after slipping more than 1% in the previous session. Bullion is up 0.4% this week.
U.S. gold futures rose 0.2% to $1,907.50 per ounce.
“Concerns over rising COVID-19 cases and the increasingly likelihood of a democrat win in the U.S. election, which is likely to result in greater stimulus and weaken the dollar, are helping gold rise,” said Cameron Alexander, manager of precious metals research at Refinitiv Metals Research.
“Signs of a potential (U.S. stimulus) deal earlier may have provided some upwards momentum.”
House Speaker Nancy Pelosi on Thursday said negotiators were making progress in talks with the White House over the coronavirus fiscal aid package and a deal could be reached “pretty soon”.
Gold has risen over 26% this year benefiting from massive stimulus by governments and major central banks to cushion economies from the pandemic.
Limiting gold’s gains, the dollar index rose 0.1% on Friday against a basket of major currencies.
Market focus now shifts to the Nov. 3 U.S. presidential election after President Donald Trump and Democratic challenger Joe Biden offered sharply contrasting views on the pandemic at Thursday’s final presidential debate.
“Gold will find plenty of willing buyers on dips to $1,900 as investors rotate into haven positioning as the U.S. election draws nearer,” Jeffrey Halley, senior market analyst at OANDA, said.
“We expect that to accelerate next week and for gold to move to $1,950.00 an ounce over the coming sessions.”
Elsewhere, silver fell 0.6% to $24.60 an ounce, but was set for a weekly rise of 1.8%. Platinum was little changed at $884.55 and palladium rose 0.8% to $2,392.93.