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Gold dips as U.S. stimulus remains elusive

Published 10/12/2020, 12:30 pm
Updated 10/12/2020, 12:36 pm
© Reuters.
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Dec 10 (Reuters) - Gold prices eased on Thursday as the U.S. dollar held firm against other major currencies in the absence of signs of any additional U.S. fiscal stimulus to ease the economic blow from the COVID-19 pandemic.

FUNDAMENTALS

* Spot gold XAU= was down 0.2% at $1,835.11 per ounce by 0109 GMT, after slipping as much as 2.5% on Wednesday. U.S. gold futures GCv1 rose 0.1% to $1,839.70.

* The U.S. House of Representatives on Wednesday approved a one-week extension of federal government funding, giving lawmakers more time to agree on a broader coronavirus relief package. But, the U.S. Senate Majority Leader Mitch McConnell said on Wednesday that lawmakers were still looking for a way forward on a relief package. Gold is seen as a hedge against inflation and currency debasement likely to result from large stimulus measures.

* Dimming some of the optimism over COVID-19 vaccine, Britain's medicine regulator warned people with significant allergies not to get Pfizer-BioNTech's COVID-19 vaccine after two people suffered adverse reactions. Offering a new glimmer of hope, some U.S. health officials said vaccinations could begin as soon as this weekend, and states have escalated plans for its distribution. British Prime Minister Boris Johnson and the European Union's chief executive gave themselves until Sunday for negotiations on a post-Brexit trade deal after failing to narrow differences during discussions in Brussels. Gold is also seen as a hedge against political and economic uncertainty.

* Gold-backed exchange traded funds (ETFs) shrank in November, the World Gold Council (WGC) said on Wednesday. Silver XAG= fell 0.3% to $23.85 an ounce, while platinum XPT= gained 0.2% to $1,003.07 and palladium XPD= was up 0.7% at $2,279.83.

DATA AHEAD (GMT)

0700 UK

Oct. Manufacturing Output

1330 US

Nov. CPI MM

1330 US

Weekly Initial Jobless Claim

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