Gold retreats but on track for weekly rise
Spot gold falls 0.6% as bullion is set for its best week since late July
Bengaluru — Gold fell on Friday after surging in the previous session, as the dollar gained, but was set for its best week since late July on hopes for more central bank economic support as investors bet on a divided US Congress under a Biden presidency.
Spot gold fell 0.6% to $1,936.95/oz by 4.02am GMT. Prices soared 2.4% on Thursday on a dollar slide, setting it up for a 3.1% gain for the week. US gold futures fell 0.4% to $1,939.00/oz.
The dollar rose, making gold less attractive to other currency holders.
“A small rally by the dollar in Asia has seen gold profit-taking appear, but the fundamentals appear to be rapidly aligning for further gold strength,” said Jeffrey Halley, senior market analyst at Oanda.
“The US election seems likely to give us a Democrat president and Republican Senate, maintaining the status quo on policy and that has allowed markets to get back to the real issue of 2020 — central bank easing on a huge scale.”
Joe Biden edged closer to victory but votes were still being counted in key states and Republican incumbent Donald Trump escalated efforts to cast doubt on the election’s integrity. Prospects of a divided Congress dimmed chances for immediate stimulus, driving expectations the Fed might need to fill the gap.
“Is there enough fiscal stimulus to trigger the inflation aspect for gold to rise to $2,000 again? Ultimately that’s going to happen but this is where the uncertainty lies,” said Stephen Innes, chief global market strategist at financial services firm Axi.
The US Federal Reserve on Thursday promised to keep interest rates low. Near-zero interest rates amid huge pandemic-driven stimulus globally have helped non-yielding gold, considered an inflation hedge, gain over 27% this year.
Silver fell 0.7% to $25.15/oz. Platinum dropped 0.4% to $888.76/oz, while palladium gained 0.5% to $2,388.40/oz.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.