Gold prices gained some ground on Wednesday after President Donald Trump threatened not to sign the U.S. pandemic relief bill, triggering a drop in the dollar.
Spot gold was up 0.3% at $1,865.65 per ounce by 1056 GMT, while U.S. gold futures were steady at $1,870.90. Bullion has climbed about 23% so far this year and is poised for its biggest annual gain since 2010 as central banks and governments globally unleashed unmatched stimulus to cushion the economic blow of the coronavirus crisis.
“The market is quite optimistic about the (U.S. stimulus) bill getting passed eventually,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.
“The real trigger for gold would be (a) prolonged easing of central bank balance sheets and a continued fall in (the) dollar,” Shah added The dollar index dropped 0.3% against rival currencies after Trump’s threat to not sign a coronavirus recovery bill, enhancing gold’s appeal to non-U.S. investors.
“A sense of uncertainty has been spurred after President Trump’s announcement,” said StoneX analyst Rhona O’Connell.
“At the first glance it looks like it has reduced the chances for growth in inflation but that has been overshadowed by the uncertainties of a delay in the stimulus, which is now a necessity for the economic recovery.”
A coronavirus mutation has prompted many nations to close their doors to Britain, denting hopes of a worldwide economic revival after the pandemic.
“On the upside, there is no real resistance until $1,900, although the area around $1,875-$1,880 is likely to be the first test for any recovery attempt (for gold),” ActivTrades’ chief analyst Carlo Alberto De Casa said in a note.
Silver rose 1.3% to $25.45 an ounce. Platinum gained 1.2% to $1,013.55 and palladium was up by 0.4% at$2,323.77.
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