NEW YORK: Gold jumped 1% on Monday on optimism around a US stimulus bill and a weakened dollar, despite gains in the stock markets after reports that US President Donald Trump could soon be discharged from the hospital.
Spot gold was up 0.7% at $1,912.80 per ounce as of 2:12 p.m. EDT (1812 GMT), after hitting the highest since Sept. 22 at $1,918.36. US gold futures settled up 0.7% to $1,920.10.
Optimism over fiscal stimulus came into play after upbeat weekend comments from US House Speaker Nancy Pelosi, who said progress was being made on relief legislation.
"Maybe there is a little skinnier deal in the horizon that Pelosi would agree to and Republican party would agree to and I think the stimulus will be a boon for the metals," said Daniel Pavilonis, senior market strategist at RJO Futures.
A little bit of risk-on sentiment has been a negative for gold, Pavilonis said, adding that "we could see another sideways week."
The dollar was down 0.4% against rivals, making gold cheaper for holders of other currencies. Global stocks cheered news that Trump could be discharged from the hospital as soon as Monday, although outside experts warned that his case may be severe.
Trump's Covid-19 infection has also raised uncertainties around the US presidential election on Nov. 3.
"Barring a split government outcome, both administrations are likely to push through a large-scale fiscal deal in no time that would help de-bottleneck the real rate suppression, lifting precious metals in the process," TD Securities said in a note.
"Considering a Blue Wave would likely result in the largest package, (Democratic candidate Joe) Biden's election odds are increasingly likely to drive gold prices in the coming month."
Looking ahead, markets will be watching out for the release of minutes from US Federal Reserve's September meeting on Wednesday. Among other metals, silver gained 2.4% to $24.27 per ounce, platinum rose 1.3% to $893.00 and palladium climbed 2.5% to $2,366.00.
Comments
Comments are closed.