PRECIOUS-Gold jumps 1% on dollar slide, U.S. stimulus progress

  • Reuters
  • Commodities News
PRECIOUS-Gold jumps 1% on dollar slide, U.S. stimulus progress
Credit: © Reuters.

(Updates prices)

* Bank of England keeps stimulus programme unchanged

* Dollar hovers near a two-and-a-half-year low

* Interactive graphic tracking global spread of coronavirus: open

* in an external browser

By Diptendu Lahiri

Dec 17 (Reuters) - Gold prices rose as much as 1% on Thursday as the dollar index extended its slide on progress with U.S. stimulus plans and the Federal Reserve's commitment to pump more cash into the economy and keep interest rates low.

Spot gold XAU= was up 0.7% at $1,876.37 per ounce at 1223 GMT, having hit a near one-month high of $1,882.76 earlier in the session. U.S. gold futures GCv1 were up 1.3% at $1,882.70.

"The Fed's decision clearly indicates that it is not convinced of an economic recovery yet," Quantitative Commodity Research analyst Peter Fertig said.

"Given, the stand of the Fed and other central banks, there are indications that inflation will go up in future and with the dollar index down quite a bit, gold looks like an attractive investment."

Legislators said on Wednesday, U.S. congressional negotiators were "closing in" on a $900 billion COVID-19 assistance package planned to provide $600-$700 stimulus checks for individuals, dragging the dollar to a more than two year low. USD/ Fed has vowed to maintain its bond-buying policy before "substantial further progress" is made to restore full jobs and meet its 2% inflation target. the central banks keep tolerating a higher inflation level, it will bring down real rates further, helping reduce the opportunity cost of holding gold," said Ravindra Rao, vice president, commodities at Kotak Securities.

The Bank of England kept its stimulus programme unchanged on Thursday as it awaited the outcome of Britain's negotiations with the European Union over a post-Brexit trade deal. gold is still quite strong and if it closes above $1,880 an ounce today we might see it going up to $1,950 before the year ends," Rao said.

In other metals, silver XAG= rose 1.4% to $25.69 an ounce. Platinum XPT= gained 1.7% to $1,052.22 and palladium XPD= was up 0.9% at $2,346.85.

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  • tejshree thakur @tejshree thakur
    but as per fed expectations corona control continue. and hope market will recovery slightly. so analyst can't saying a good forecast but we hope world wide market are recovery seen. and more or lest every month better than previous month. so dollar and also gold may down in short term and after corona vaccine next month dollar will strong
    Like 1

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