PRECIOUS-Gold climbs on U.S. stimulus hopes post Fed statement

  • Reuters
  • Commodities News
PRECIOUS-Gold climbs on U.S. stimulus hopes post Fed statement
Credit: © Reuters.

(Recasts, adds comments, updates prices)

* Silver rises more than 3%

* Fed promises to keep bond purchases going

* Gold up more than 22% so far this year

* Interactive graphic tracking global spread of coronavirus: open

* in an external browser

By Shreyansi Singh and Brijesh Patel

Dec 16 (Reuters) - Gold rose on Wednesday on prospects for more stimulus measures after the U.S. Federal Reserve pledged to keep its benchmark interest rate near zero until an economic recovery is complete.

Spot gold XAU= was up 0.5% at $1,862.72 an ounce by 4:16 p.m. EST (2116 GMT). U.S. gold futures GCv1 settled up 0.2% to $1,859.10.

Fed Chair Jerome Powell said in a news conference the U.S. economy might take continued support from both fiscal, monetary policy for recovery. managed to quell an initial market sell-off by reassuring that a very vigilant Fed would not hesitate to expand support if necessary," said Tai Wong, head of base and precious metals derivatives trading at BMO.

"Powell is quite bullish for H2'21 with the vaccines but remains quite concerned about the next four to five months. Gold in particular held key support under $1,850 and bulls will read the sharp bounce higher is a repudiation of the downside."

Lawmakers in Congress were "closing in" on a $900 billion COVID-19 aid bill that would include $600 to $700 stimulus checks and extended unemployment benefits. has risen over 22% so far this year, banking on its appeal as a hedge against inflation likely due to the unprecedented stimulus unleashed in 2020.

The Fed promised to keep funnelling cash into financial markets to fight the recession, even as policymakers' 2021 outlook improved following initial rollout of a coronavirus vaccine. news on vaccines has lifted hopes over quick economic recovery. However, investors still remain concerned over surging coronavirus cases. XAG= gained 3.5% to $25.35 an ounce, while platinum XPT= fell 0.4% to $1,032.71. Palladium XPD= rose 0.6% to $2,331.71.

"Unless the current wave of infections derails the global economy, recovering industrial production may further boost silver and the PGMs (platinum group metals)," HSBC analyst James Steel said in a note.

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