Gold gains on subdued dollar after Brexit trade deal

0

Gold prices edged higher in holiday-thinned trade on Thursday, helped by a U.S. dollar that stayed lower after Britain clinched a trade deal with the European Union, although gains were capped by an uptick in risk appetite.

Spot gold rose 0.3% to $1,877.41 per ounce. U.S. gold futures were up 0.2% at $1,882.10.

“Supportive factors for the gold market include the weaker U.S. dollar index for the past couple of days after gains earlier this week,” said Kitco Metals senior analyst Jim Wyckoff. “Limiting the upside is global stock markets that are still in rally mode and that’s just siphoning funds away from the safe-haven precious metal.”

Risk sentiment was upbeat, while the U.S. dollar was weighed down by investors opting for sterling as Britain clinched a Brexit trade deal with the European Union. Investors largely brushed off U.S. President Donald Trump’s threat to not sign a nearly $900 billion stimulus bill.

“Investors are pretty optimistic about fiscal and monetary supports from governments around the globe, even though a vaccine reduces the might of the virus,” UBS analyst Giovanni Staunovo said.

Worries over the spread of a more transmissible coronavirus variant have led to a tightening of restrictions in Britain, underlining concerns over a post-pandemic economic recovery.

Meanwhile, data on Wednesday showed the number of Americans filing first-time claims for unemployment benefits remained elevated but posted a fall last week.

Considered a hedge against inflation and currency debasement, gold has gained more than 23% this year, helped by massive amounts of stimulus to support pandemic-hit economies.

Silver was up 0.9% at $25.77. Platinum gained 0.7% to $1,021.19 and palladium rose 0.2% to $2,328.64.

Trading is expected to be subdued ahead of the Christmas holidays.

This site uses Akismet to reduce spam. Learn how your comment data is processed.