Gold prices staged a comeback on Monday, after paring gains earlier, as investors celebrated U.S. President Donald Trump’s signing of a long-awaited pandemic aid bill that also weighed on the U.S. dollar.
Spot gold gained 0.9% to $1,893.11 per ounce by 10:15 a.m. EST (1515 GMT), U.S. gold futures were up 0.9% to $1,900.50.
Gold’s move up is “clearly in response to another wave of stimulus which continues to weaken the dollar and support commodity prices across the board including gold and silver", said David Meger, director of metals trading at High Ridge Futures.
The dollar index was down 0.2% against rivals, slipping to a one-week low and also raising bullion’s appeal for other currency holders.
Trump on Sunday signed into law a $2.3 trillion pandemic aid and spending package, restoring unemployment benefits to millions of Americans.
Gold rose as much as 1.3% to its highest since Dec. 21 at $1,900.04 during Asian trading hours but pared gains later. Gold’s gains came despite upbeat risk sentiment, with Wall Street’s main indexes touching record highs in early trading. [.N]
“Even without extra stimulus, gold could climb higher … Trump’s signature (on the stimulus bill) was the last major risk point to the bull market," said Jeffrey Halley, a senior market analyst at OANDA.
Bullion, considered a hedge against inflation, has risen about 25% so far this year amid the unprecedented stimulus unleashed globally.
Silver jumped 2.7% to $26.55 an ounce, after hitting a one-week peak of $26.75 earlier. Platinum climbed 1.7% to $1,041.35 and palladium gained 3.1% to $2,421.42, after rising over 5% earlier.
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