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Gold pares gains on dollar rebound, upbeat risk sentiment

Published 29/12/2020, 02:36 am
© Reuters.
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(Recasts, adds analysts' comments, updates prices)

* Silver hits one-week peak

* Palladium jumps to over one-month high

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

By Shreyansi Singh

Dec 28 (Reuters) - Gold prices pared gains in choppy trading on Monday as the dollar recovered and stock markets continued their rally, while U.S. President Donald Trump's signing of a long-awaited pandemic aid bill offered support.

Spot gold XAU= was little changed at $1,875.99 per ounce by 2:20 p.m. EST (1920 GMT). U.S. gold futures GCv1 settled down 0.2% at $1,880.40.

"We're going into the holidays. In reality it doesn't take much to move things right now," said Daniel Pavilonis, senior market strategist at RJO Futures.

"Maybe it's just the reverberation in the dollar market. Ultimately gold is going to continue to move higher."

The dollar index .DXY rebounded, after slipping to a one-week low earlier, making bullion expensive for other currency holders. USD/

Trump on Sunday signed into law a $2.3 trillion pandemic aid and spending package, restoring unemployment benefits to millions of Americans. stimulus package being passed will be inflationary and boost gold in the future. You should really be buying gold on these pullbacks," said Michael Matousek, head trader at U.S. Global Investors.

Gold rose as much as 1.3% to its highest since Dec. 21 at $1,900.04 during Asian trading hours but pared gains later in volatile trading due to the holidays.

Gold was dented by an upbeat risk sentiment, with Wall Street's main indexes touching record highs. .N

Bullion, considered a hedge against inflation, has still risen over 23% so far this year amid the unprecedented stimulus unleashed globally.

Silver XAG= jumped 1.8% to $26.32 an ounce, after hitting a one-week peak of $26.75 earlier. Platinum XPT= climbed 1% to $1,033.74 and palladium XPD= gained 0.6% to $2,335.52, after rising to a peak since Nov. 11 at $2,470.43 earlier.

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