PRECIOUS-Gold gains as U.S. stimulus and vaccine hopes dent dollar

  • Reuters
  • Commodities News
PRECIOUS-Gold gains as U.S. stimulus and vaccine hopes dent dollar
Credit: © Reuters.

(Adds comments, updates prices)

* Vaccine hopes to have limited impact on gold - analyst

* Dollar drops to 2-1/2 year trough

* Interactive graphic tracking global spread of coronavirus:

By Nakul Iyer

Dec 3 (Reuters) - Gold climbed on Thursday as the dollar dropped on hopes that coronavirus vaccines will be rolled out soon and cautious investor optimism over a U.S. stimulus deal.

Spot gold XAU= was up 0.3% at $1,837.30 per ounce at 0822 GMT, having hit its highest since Nov. 23 at $1,843.11. U.S. gold futures GCv1 were up 0.7% at $1,843.60.

Hopes of a stimulus deal and vaccine progress pushed the U.S. dollar to a near 2-1/2-year low, making bullion cheaper to holder of other currencies. USD/

Although Congressional lawmakers were unable to agree on a fresh U.S. coronavirus relief package, early signs indicate that a $908 billion bipartisan proposal could be gaining traction as a negotiating tool. talks, especially over a bipartisan agreement, will support gold in the short term as it will likely weaken the U.S. dollar, said Michael Langford, executive director at corporate advisory and consultancy firm AirGuide.

However, optimism over a COVID-19 vaccine could have limited impact on bullion as much of it is priced in, he added.

Health experts in the United States welcomed Britain's emergency approval of Pfizer (NYSE: PFE )'s PFE.N vaccine, in a sign that U.S. regulators may soon follow suit. will take a long time to cure COVID-19," said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India, adding that given the level of monetary debasement, gold could rise to $1875-$1880 in December.

Gold is undervalued given the weaker dollar and low-interest rates and should be trading in the 1900s, Howie Lee, economist at OCBC Bank said, adding it could rally in the near future.

Lower interest rates lower the opportunity cost of holding non-yielding bullion.

Silver XAG= were little changed at $24.11 an ounce, while platinum XPT= rose 0.8% to $1,022.25 and palladium XPD= gained 0.5% to $2,410.29.

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