PRECIOUS-Gold gains as dollar dips, investors bet on stimulus

  • Reuters
  • Commodities News
PRECIOUS-Gold gains as dollar dips, investors bet on stimulus
Credit: © Reuters.

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* Vaccine optimism steers Asian equities to record highs

* Gold may retest support at $1,855 per ounce -technicals

* Interactive graphic tracking global spread of coronavirus: open

* https://tmsnrt.rs/3aIRuz7 in an external browser

By Nakul Iyer

Nov 23 (Reuters) - Gold rose on Monday, supported by a softer dollar and bets for further U.S. monetary stimulus to revive the pandemic-hit economy outweighing pressure from optimism over a possible COVID-19 vaccine rollout next month.

Spot gold XAU= rose 0.2% to $1,874.30 per ounce by 0729 GMT and U.S. gold futures GCv1 fell 0.1% to $1,870.90.

U.S. Treasury Secretary Steven Mnuchin on Friday reassured markets that the Fed and Treasury had many tools left to support the economy, after deciding to de-fund several Federal Reserve lending programs by the end of the year. the failure to deliver a fiscal package is supportive for gold," said Michael McCarthy, chief strategist at CMC (NS: CMC ) Markets, noting there might be more reliance on Fed support likely in the form of liquidity and lower interest rates as a result.

Non-yielding gold is often seen as a hedge against inflation that is likely to result from stimulus measures.

Also lending support was a softer U.S. dollar, that lowered the cost of purchasing it to other currency holders. USD/

Gold's advance also came despite news that U.S. healthcare workers could start getting COVID-19 inoculation shots within a day or two of regulatory consent next month, helping to push Asian equities to record highs. MKTS/GLOB

"The vaccine is not going to change the fundamentals of gold in near term ... It is going to take a lot of time for vaccine to penetrate into the global market," said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.

On the technical front, gold may retest support at $1,855 per ounce, a break below which could cause a fall to $1,841, according to Reuters technical analyst Wang Tao. TECH/C

Silver XAG= rose 0.2% to $24.19 an ounce. Platinum XPT= fell 0.2% to $943.66, while palladium XPD= was 0.5% higher at $2,338.02.

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