30 Dec, 2020 - Gold firms as dollar slides to multi-year low
Gold prices edged higher on Wednesday, as the prospect of increased fiscal aid pushed the dollar to its lowest in more than two years, although global COVID-19 vaccine rollouts and increased risk appetite limited bullion’s gains.
Spot gold rose 0.3% to $1,883.41 per ounce by 09:53 a.m. EST (1453 GMT). U.S. gold futures were up $10.5 to $1,893.4
“The U.S. dollar index touched a new low - that’s working in favour of the gold and silver market,” said Kitco Metals senior analyst Jim Wyckoff. “However, upbeat risk appetite in the market place, evident by stock indexes at or near record highs is tempering buying enthusiasm. You’ve got this tug and pull at work right now.”
The dollar index touched a low since April 2018 following U.S. Senate Majority Leader Mitch McConnell’s decision to delay a vote on increasing COVID-19 relief checks to $2,000.
U.S. stocks rose on hopes of additional fiscal stimulus and on optimism over vaccine rollouts, as Britain became the first country to approve a vaccine developed by AstraZeneca and Oxford University.
“The bigger picture is that gold is still holding up incredibly well at these price levels and the fiscal and monetary stimulus will still be there in 2021 as the pandemic is hitting hard in the U.S., Europe,” said Bank of China International analyst Xiao Fu.
Investors await the Jan. 5 Georgia runoff elections that will determine which political party will control the U.S. Senate, with expectations for more stimulus under a Democrat-controlled Senate and House.
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31 Dec, 2021 - Gold on course for best year in a decade
Gold steadied as the dollar extended losses on Thursday, with the metal on track for its best year in a decade on economic uncertainty and as governments worldwide doled out massive stimulus to lessen the impact of the COVID-19 pandemic.
Spot gold was trading around $1,892.97 per ounce by 1:53 p.m. EST (1853 GMT). U.S. gold futures settled up 0.1%, at $1,895.10.
Bullion has gained 25% so far in 2020 as global central banks and governments have delivered economic stimulus, laying the ground for higher inflation and currency debasement.
“With reduced market participants activity on the last day of the year, I expect gold to move in a narrow range. Some modest support is coming from a slightly weaker U.S. dollar and modestly lower U.S. real rates,” said UBS analyst Giovanni Staunovo.
“We look for a move towards $1,950 in the first quarter of 2021, with the expansionary monetary and fiscal policy pushing inflation expectations up and with U.S. real rates falling further.”
The dollar index fell to a more than two-year trough, making gold cheaper for other currency holders.
The U.S. Federal Reserve will remain extraordinarily accommodative through 2022 and an increasingly progressive Democratic Party is looking to borrow and spend aggressively, said Tai Wong, head of base and precious metals derivatives trading at BMO.
Outperforming gold this year with a nearly 48% gain, its strongest performance since 2010, spot silver was, however, down 1.2% at $26.30 an ounce on Thursday.
“We forecast further silver outperformance in 2021 on the basis of additional tailwinds from the green transformation driving increased industrial demand, together with the expected economic recovery benefiting silver more than gold,” said Saxo Bank analyst Ole Hansen.
Palladium looked set to post gains for a fifth consecutive year, having risen over 25% in 2020, while platinum is on track to record a second straight yearly rise, climbing about 10%.
Palladium jumped 3% to $2,433.61 and platinum eased 0.2% to $1,063.52.
Reference: CNBC, REUTERS
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