Gold hits 1-week high as dollar eases, pandemic worsens
· Gold prices touched a one-week high on Monday as the dollar retreated, while mounting U.S. coronavirus cases fueled concerns over the pandemic’s impact on economic recovery, underpinning hopes of further monetary stimulus.
· Spot gold rose 0.2% to $1,892.15 per ounce by 0540 GMT, after hitting its highest level since Nov. 9 at $1,898.81 earlier in the session.
· U.S. gold futures were up 0.3% at $1,892.20.
· The dollar index hit a one-week trough, making bullion cheaper for holders of other currencies.
· Coronavirus cases crossed the 11-million mark in the United States on Sunday, while President-elect Joe Biden’s top advisers called for urgent action to address the crisis.
· “There are still underlying problems in structural economies, with job creation being the biggest problem,” said Stephen Innes, chief global market strategist at financial services firm Axi.
· “Central banks are going to keep the markets flushed enough to bridge this gap between now and the vaccine.”
· Germany’s Economy Minister Peter Altmaier said the country should brace for another 4-5 months of severe measures to halt the outbreak.
· U.S. Federal Reserve Chairman Jerome Powell repeated last week his view that more action from the central bank and Congress, in the form of further fiscal stimulus, would likely be needed.
· Gold, which tends to benefit from stimulus measures from central banks as it is considered a hedge against inflation and currency debasement, has soared 25% this year.
· Prices fell 3.3% last week after Pfizer said its experimental Covid-19 vaccine was over 90% effective based on initial trial results.
· “From a technical point of view, gold may face some resistance around $1,900-$1,905,” said Howie Lee, economist at OCBC Bank, adding that bullion’s move higher depends on clarity on fresh U.S. fiscal stimulus.
· Silver rose 1.1% to $24.91 per ounce. Platinum rose 1% to $897.52, while palladium was 1.1% higher at $2,350.20.
Reference: CNBC
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