News18» News»Business»Gold Firms As Investors Bet On More Stimulus-led Inflation
1-MIN READ

Gold Firms As Investors Bet On More Stimulus-led Inflation

Gold Firms As Investors Bet On More Stimulus-led Inflation

Gold eked out gains on Wednesday, underpinned by data showing a rise in consumer prices in the United States and expectations that more fiscal stimulus from a Joe Biden administration could trigger higher inflation.

Gold eked out gains on Wednesday, underpinned by data showing a rise in consumer prices in the United States and expectations that more fiscal stimulus from a Joe Biden administration could trigger higher inflation.

Spot gold recouped losses from earlier in the session and was up 0.2% at $1,859.06 an ounce at 1035 EST (1535 GMT), with U.S. gold futures up 0.8% at $1,858.60.

Bob Haberkorn, senior market strategist at RJO Futures, said expectations for more stimulus, higher than expected inflation data and the flight to safety because of the political environment in the United States were factors driving gold higher.

The Labor Department on Wednesday said its consumer price index increased 0.4% last month after gaining 0.2% in November.

“It shows that there’s a slight uptick in inflation, which is always supportive of gold,” Haberkorn said.

U.S. President-elect Joe Biden said he would unveil a plan on Thursday to provide trillions of dollars of support for the American economy as it grapples with the coronavirus crisis.

Bullion is seen as a hedge against inflation and currency debasement that could result from large stimulus measures.

Gold’s advance came despite benchmark 10-year Treasury yields hovering close to their highest in nearly 10 months and a firmer dollar, making gold more expensive for holders of other currencies.

“Gold could challenge $1,800 on the downside. To the upside $1,900 is the next level to watch,” said Daniel Ghali, commodity strategist at TD Securities.

U.S. Federal Reserve officials expect a strong economic rebound when COVID-19 vaccinations gather pace, while monetary policy will remain accommodative.

The release of the Fed’s “Beige Book” survey of businesses is awaited later on Wednesday.

Among other precious metals, silver fell 0.2% to $25.52 an ounce, platinum rose 2.1% to $1,098.67 and palladium was down 0.7% at $2,376.33.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor


Next Story
Loading...