PRECIOUS-Gold firms on stimulus bets, weak dollar

  • Reuters
  • Commodities News
PRECIOUS-Gold firms on stimulus bets, weak dollar
Credit: © Reuters.

(Updates prices)

* Platinum hits highest since Jan. 16 at $1,034/oz

* Palladium falls over 7%

* Dollar trades near 2-1/2 year low

* Interactive graphic tracking global spread of coronavirus:

By Shreyansi Singh

Dec 3 (Reuters) - Gold firmed on Thursday as the dollar fell and investors clung to hopes of an eventual breakthrough in negotiations over a new U.S. coronavirus aid package.

Spot gold XAU= gained 0.4% to $1,838.83 per ounce at 2:15 p.m. EST (1915 GMT). It earlier hit its highest since Nov. 23 at $1,843.80, but gave up gains following a lower-than-expected U.S. jobless claims number. gold futures GCv1 settled up 0.6% at $1,841.10.

U.S. lawmakers sought to hammer out an agreement on aid for an ailing U.S. economy with signs that a $908 billion bipartisan proposal was gaining traction, while U.S. President Donald Trump expressed support for a relief bill. Biden coming to power in Washington could lead to more stimulus, said Daniel Pavilonis, senior market strategist at RJO Futures.

But ultimately, "the gold market expected a lot more stimulus" than is being negotiated, he added, capping bullion's upside. surrounding a stimulus deal and progress over COVID-19 vaccines kept the dollar index near a more than two-year low, buoying appeal for gold among investors holding other currencies. USD/

"Stimulus talks and further dollar weakening are lending more support to gold," said StoneX analyst Rhona O'Connell in a note.

Gold, considered a hedge against inflation and currency debasement, has risen more than 21% this year, benefiting from near-zero interest rates and the risk of higher inflation likely to result from massive stimulus globally to ease the economic blow from the pandemic.

Platinum hit a near eleven-month peak at $1,034 per ounce. It was last up 1.3% at $1,028.07.

Platinum has consolidated above $1,000 on positive global growth sentiment, with initial targets extending towards $1,040 as exchange traded fund interest drives price action related to deficits forecast in 2021, MKS PAMP said in a note.

Palladium XPD= fell 4% to $2,301.68 per ounce, after plunging as much as 7.3% earlier and silver XAG= was down 0.4% at $24.00.

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