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Gold holds firm as weaker dollar, U.S. stimulus hopes lend support

Category: Economy

Date: 2020-10-08T09:56:18+0000
Gold holds firm as weaker dollar, U.S. stimulus hopes lend support

Shafaq news/ Gold prices ticked up on Thursday, helped by a softer dollar and renewed optimism over some U.S. coronavirus relief aid, with investors eyeing the weekly jobless claims data to further gauge the health of the world's largest economy.

Spot gold rose 0.1% to $1,888.46 per ounce by 0600 GMT. U.S. gold futures were up 0.1% at $1,892.80.

"Gold needs both fiscal and monetary policy to come into play," said Edward Moya, a senior market analyst at OANDA.

"The virus' spread is still strong in more states and also in Europe, and that is going to force policymakers and lawmakers to deliver more stimulus," Moya said, adding that the metal is now in a wait-and-see mode.

After shutting down negotiations over a larger stimulus deal, Trump wrote on Twitter that Congress should pass money for airlines, small businesses, and stimulus checks of $1,200 for individuals, fuelling hopes for a partial deal.

Meanwhile, minutes from the U.S. Federal Reserve's September offered no clear sense of their next steps to offset the coronavirus recession. Many policymakers said their economic outlook assumed additional fiscal support.

Gold, seen as a hedge against inflation and currency debasement, has risen 24% this year, supported by massive government and central bank stimulus worldwide.

The dollar index was down 0.1% against rivals, while Asian shares hit a one-month high.

"What the U.S. dollar does around investors' risk appetite is going to dictate what gold does," said ANZ analyst Daniel Hynes.

Investors now await U.S. employment data due later in the day. Jobless claims is predicted to decline, however, continued claims are likely to remain above 10 million.

Elsewhere, silver rose 0.2% to $23.88 per ounce. Platinum fell 0.1% to $863.25 per ounce, while palladium was 0.4% higher at $2,362.44.


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