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PRECIOUS-Gold firms near $1,900 level on stimulus hopes, sombre dollar

Published 01/10/2020, 08:12 pm
Updated 01/10/2020, 08:18 pm
© Reuters.
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* Platinum hits more than one-week high of $908.50/oz

* U.S. weekly initial jobless claims data due at 1230 GMT

* Interactive graphic tracking global spread of coronavirus: https://graphics.reuters.com/world-coronavirus-tracker-and-maps/ (Recasts, adds comments, updates prices)

By Nakul Iyer

Oct 1 (Reuters) - Gold rose close to the $1,900 mark on Thursday, boosted by an easing dollar and increased investor confidence that there will be further U.S. fiscal stimulus measures to aid the virus-beaten economy.

Spot gold XAU= rose 0.6% to $1,896.78 per ounce by 1002 GMT, having ended September 4.3% lower, in its biggest monthly drop since November 2016.

U.S. gold futures GCv1 were 0.3% higher at $1,901.70 per ounce.

On Wednesday, U.S. Treasury Secretary Steven Mnuchin said talks with House Speaker Nancy Pelosi "made a lot of progress" on the long-awaited COVID-19 relief legislation. analyst Rhona O'Connell said uncertainty over the outcome of the U.S. Presidential election remained a supportive factor longer term, but negotiations over stimulus between Pelosi and Mnuchin were likely to influence trade more in the short term.

Regardless of the election outcome, "there will still likely be wrangling over fiscal stimulus to try and maintain financial stability ... I think there will be decently sized stimulus anyway, but the political nuances will stay," she said.

Gold is often viewed as a hedge against inflation and currency debasement.

Hopes for the passage of a long-awaited fiscal stimulus package in the U.S. and strong labour and manufacturing data gave a boost to risk sentiment and pushed the dollar to a one-week low. USD/ MKTS/GLOB

A weaker dollar makes bullion cheaper for investors who hold other currencies.

Market participants await U.S. initial jobless claims data due later on Thursday and a non-farm payrolls report on Friday for clues about the pace of recovery in the world's largest economy.

If U.S. jobs data is at least in line with expectations and as long as the wage inflation number is strong, that may be gold negative, said DailyFx currency strategist Ilya Spivak.

Among other precious metals, silver XAG= rose 2.2% to $23.71 per ounce. Platinum XPT= hit a more than one-week high of $908.50 per ounce and was last up 1.2% at $898.66, while palladium XPD= fell 0.2% to $2,300.90.

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