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Gold falls, but eyes weekly gain on economic recovery worries

Published 12/09/2020, 01:12 am
Updated 12/09/2020, 04:18 am
© Reuters.
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* Gold up 0.4% this week

* Platinum on track for best week since early August

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)

By Sumita Layek

Sept 11 (Reuters) - Gold slipped on Friday on a lack of further stimulus from the European Central Bank and the U.S. government, but for the week the safe-haven metal was set to end higher on concerns over an economic recovery.

Spot gold XAU= fell 0.7% to $1,941.07 per ounce by 1:51 p.m. EDT (1751 GMT); prices were up 0.4% so far this week. U.S. gold futures GCv1 settled down 0.8% to $1,947.90.

"There was a bit of disappointment with the ECB, because of expectations that we're going to see more stimulus," Edward Moya, senior market analyst at broker OANDA, said.

ECB President Christine Lagarde on Thursday refrained from signaling that the bank would expand stimulus, while, the U.S. Senate blocked a Republican bill for new coronavirus aid. are transitioning into a post-COVID type of environment. That means we're not going to be pumping out the same stimulus, that signals to the market that things are going to be a little different going forward," said Daniel Pavilonis, senior market strategist at RJO Futures.

Gold has risen 28% this year, supported by massive stimulus by global central banks, with the metal perceived as a hedge against inflation and currency debasement.

Pavilonis said gold could touch $2,300 an ounce by year-end on uncertainty surrounding equity markets, the economy and the November U.S. elections.

Investors are now awaiting the U.S. Federal Reserve's policy meeting next week, on Sept. 15-16.

"The labor market recovery has completely stalled, the Congress has delivered zero extra dollars since the last Fed meeting, and there's going to be a lot more pressure for the Fed to maintain an accommodative stance," Moya said.

Elsewhere, silver XAG= fell 0.8% to $26.70 per ounce, while palladium XPD= rose 0.8% to $2,311.56.

Platinum XPT= was flat at $926.23, but was heading for its best week since the week ending Aug. 7, up 3.4%.

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