Gold gave up early losses and gained on Monday after U.S. Treasury Secretary Steven Mnuchin said an agreement over coronavirus relief aid could be reached by this week to help the pandemic-hit economy.
Spot gold rose 0.2% to $2,037.70 per ounce by 11:00 am EDT (1500 GMT), but was still below last sessions’ record $2,072.50. U.S. gold futures gained 1.1% to $2,050.50.
“The U.S. government is fighting if they should create $1 trillion or $3 trillion for COVID response and the dollar is weakening, so investors are buying gold just based off that,” said Bob Haberkorn, senior market strategist at RJO Futures.
“The governments around the world are not going to stop printing money to fight COVID in the short term and gold will benefit from that. Gold’s next target is $2,090 per ounce.”
Bullion has surged 34% so far this year amid mounting COVID-19 cases, which have battered global economies and prompted unprecedented stimulus measures.
Mnuchin on Monday said there was room for compromise on a deal for more aid and that legislation should get passed this week after negotiations with congressional Democrats collapsed last week.
On Saturday, U.S. President Donald Trump signed executive orders partially restoring enhanced unemployment payments.
The fundamental drivers such as global debt levels, negative interest rates, high unemployment levels and more stimulus packages in the United States will keep supporting gold prices, said Michael Matousek, head trader at U.S. Global Investors.
Investors will watch a U.S.-China meet on Aug. 15 to review the implementation of their Phase 1 trade deal, as tensions mount between the world’s two largest economies.
Silver jumped as much as 3.9% and was last up 2% to $28.86 per ounce, platinum was up 3.1% to $991.32, after hitting its highest since Feb. 20 at $1,002.25. Palladium climbed 4.4% to $2,271.92.
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