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Budget 2021

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Dollar lifts gold amid worries over US stimulus delay

Spot gold rose 0.3 percent to $1,883.88 per ounce by 0313 GMT. US gold futures were up 0.2 percent at $1,887.40.

December 30, 2020 / 12:43 PM IST
Source: Reuters

Source: Reuters

Gold inched higher on Wednesday as the dollar eased, while investors weighed a top US Republican leader's decision to postpone a vote on increased pandemic relief payments.

Spot gold rose 0.3 percent to $1,883.88 per ounce by 0313 GMT. US gold futures were up 0.2 percent at $1,887.40.

"A weaker dollar is enough to create a small upward momentum for confidence to be maintained in gold," said Michael Langford, director at corporate advisory AirGuide.

Gaining a greater exposure to gold makes sense in a low-yield and weakening dollar environment, he added.

The dollar index fell 0.2 percent, hovering close to its lowest level in more than two years, as traders looked past Republican Senate Majority Leader Mitch McConnell's decision to put off a vote on increasing COVID-19 relief checks to $2,000 from $600.

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Gold is seen as a hedge against inflation and currency debasement likely to result from large stimulus measures rolled out this year to cushion the impact of the pandemic.

Investors now await January 5 Georgia runoff elections that will determine which political party controls the US Senate.

Under a Democrat-controlled Senate, fiscal policy is likely to stay loose, which will weigh on the dollar and be bullish for precious metals, Avtar Sandu, a senior commodities manager at Phillip Futures, said in a note.

Meanwhile, coronavirus cases continued to soar globally, with the first case of a new infectious virus variant being detected in the United States and new infections hitting a record high in Britain.

Among other precious metals, silver rose 0.7 percent to $26.37 an ounce, platinum climbed 1.4 percent to $1,064.50 and palladium gained 0.8 percent to $2,346.18.
Reuters

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