PRECIOUS-Gold hits 2-week high as investors eye fresh U.S. fiscal support

  • Reuters
  • Commodities News
PRECIOUS-Gold hits 2-week high as investors eye fresh U.S. fiscal support
Credit: © Reuters.

(Updates prices)

* Gold hits highest since Nov. 23

* Dollar stalls slide, but still near multi-year lows

* Interactive graphic tracking global spread of coronavirus: https://tmsnrt.rs/3mvcUoa

By Shreyansi Singh

Dec 8 (Reuters) - Gold rose to a two-week peak on Tuesday, buoyed by growing expectations of more U.S. fiscal stimulus to combat the economic impact of rising coronavirus cases, while a muted dollar added further support.

Spot gold XAU= gained 0.4% to $1,871.65 per ounce by 1:49 p.m EST (1849 GMT). Earlier, it touched $1,875.07, its highest since Nov. 23.

U.S. gold futures GCv1 settled up 0.5% at $1,874.90.

"We are not too far away from the highs, and once we start getting stimulus or a clearer picture of how this is all going to play out, gold and silver will continue to move higher," said Daniel Pavilonis, senior market strategist at RJO Futures.

Raising gold's appeal for other currency holders, the dollar index stalled its slide, but was still close to multi-year lows. USD/ mounting coronavirus cases, the U.S. Congress will vote this week on a one-week stopgap funding bill to provide lawmakers more time to reach a deal on COVID-19 relief. fiscal spending is positive for gold, and the market appears to be anticipating some type of fiscal package passage, even if only temporary," James Steel, chief precious metals analyst at HSBC, said in a note.

But while a broadly defensive dollar, negative real rates and a "merciless rise in COVID-19 cases" are positive for gold and silver, "more good news on the vaccine front would be a powerful negative."

Gold, considered a hedge against inflation and currency debasement, has risen more than 23% this year, benefiting from near-zero interest rates and the risk of higher inflation likely to result from massive stimulus globally. Britain began its vaccination against COVID-19 on Tuesday. XAG= rose 0.6% to $24.64 per ounce, while palladium XPD= fell 0.7% to $2,315.79 and platinum XPT= was up 0.4% at $1,025.56.

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