PRECIOUS-Gold rises on soft dollar, stimulus bets as virus risks grow

  • Reuters
  • Commodities News
PRECIOUS-Gold rises on soft dollar, stimulus bets as virus risks grow
Credit: © Reuters.

(Updates prices)

* GRAPHIC-Have vaccines killed the gold rally? Gold to trend sideways between $1,800 and $1,850 -analyst

* Dollar holds close to nearly three-month lows

* Interactive graphic tracking global spread of coronavirus: open

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

By Asha Sistla

Nov 26 (Reuters) - Gold gained on a softer dollar on Thursday and as a mounting number of COVID-19 cases and their economic toll raised investor expectations of further fiscal and monetary support.

Spot gold XAU= was up 0.5% at $1,813.50 per ounce by 1305 GMT. U.S. gold futures GCv1 were up 0.4% to $1,812.10.

The dollar index .DXY held close to near three-month lows, raising gold's appeal for other currency holders. Meanwhile, an extension of coronavirus restrictions in Germany and a weak growth forecast for Britain kept European shares flat. USD/ .EU

Trading was expected to be thinned by the U.S. Thanksgiving holiday.

"We've had a relatively soft dollar and it hasn't given that much of a lift to gold during the decline. Now it's giving a little bit of a tailwind, giving it a lift back towards $1,860," said independent analyst Ross Norman.

"(Gold) has found its floor and there's some evidence of good buying at these lower levels. The lower price has stimulated good physical buying in the (Asian) markets." GOL/AS

U.S. Federal Reserve policymakers discussed how the central bank's asset purchases could be adjusted to provide more support for markets, according to the minutes of its Nov. 4-5 meeting. is considered a hedge against inflation likely to result from large stimulus.

"Persistently high numbers of new corona cases and extended lockdowns in many countries are increasing the need for further support in the form of monetary and fiscal policy. A vaccine will offer no quick-fix in that sense," said Commerzbank (DE: CBKG ) analyst Carsten Fritsch in a note.

"New stimulus measures are therefore likely to be set in motion in the near future, which should benefit gold. In this environment, gold is initially likely to trend sideways in a corridor of between $1,800 and $1,850."

Silver XAG= was up 0.3% to $23.37 an ounce, palladium XPD= rose 1.4% to $2,361.51, while platinum XPT= fell 0.4% to $959.62.

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