Gold bars are seen at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna, Austria. File Picture: REUTERS/LEONHARD FOEGER
Gold bars are seen at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna, Austria. File Picture: REUTERS/LEONHARD FOEGER

Gold prices rose 1% on Friday, supported by a weaker dollar and optimism over a new US coronavirus relief package after President Donald Trump said talks with Congress had restarted.

Spot gold gained 0.9% to $1,910.96/oz by 3.10am GMT. It was up 0.7% for the week. US gold futures were up 1.2% at $1,916.90/oz. The dollar index, which was down 0.2% against its rivals, was headed for a second straight weekly fall.

Renewed hopes for another fiscal stimulus pulled the dollar lower and raised expectations of a pickup in inflation, said Howie Lee, an economist at OCBC Bank. “The $1,900 level is a sticky one and, in my opinion, gold is going to trade around this level until the [US] presidential elections,” he said.

In an interview, Trump said there was a good chance a deal over Covid-19 relief could be reached, but gave no details of such a pact.

Meanwhile, House of Representatives Speaker Nancy Pelosi said legislation to help airline companies survive the pandemic fallout could only move through Congress with guarantees that a comprehensive aid bill would be developed too.

Gold, widely viewed as a hedge against inflation and currency debasement, has surged nearly 26% in 2020, boosted by unprecedented stimulus from governments and major central banks to cushion the pandemic's economic impact.

“We expect gold prices to continue to gather strength as market volatility rises with the November US presidential elections fast approaching, albeit with ebbs and flows,” Fitch Solutions said in a note. A widening lead for Democratic presidential candidate Joe Biden was also seen as opening the way for a big economic stimulus.

Silver rose 2.1% to $24.33/oz and was up 2.6% for the week. Platinum was up 1.3% at $873.65/oz and palladium was 0.3% higher at $2,380.36/oz.

Reuters

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