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PRECIOUS-Gold gains as COVID-19 cases fuel stimulus expectations

Published 15/12/2020, 09:51 pm
©  Reuters
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(Updates prices)

* Germany, Netherlands and London impose pandemic restrictions

* President-elect Joe Biden wins Electoral College vote

* Dollar hovers near a two-and-a-half-year low

* Interactive graphic tracking global spread of coronavirus: open

* https://tmsnrt.rs/3aIRuz7 in an external browser

By Asha Sistla

Dec 15 (Reuters) - Gold gained 1% on Tuesday, driven by market expectations of additional monetary and fiscal stimulus as climbing COVID-19 cases prompted fresh global restrictions with focus also turning to the U.S. Federal Reserve's policy meeting.

Spot gold XAU= was up 0.9% to $1,844.10 per ounce by 1255 GMT, while U.S. gold futures GCv1 rose 0.9% to $1,848.70.

"It is pretty dire in Europe, Asia, South Korea, Japan and the U.S., driving some stimulus expectations and giving (gold) a bit of push," Saxo Bank analyst Ole Hansen said.

Investors look forward to policy meetings of the U.S. Fed starting on Tuesday and the Bank of England on Thursday.

"It is pre-FOMC positioning but we're seeing liquidity start to dry up and that means any changes in the flow of news and data can have an oversized impact as the market winds down ahead of Christmas and New Year."

Surging coronavirus cases prompted lockdowns in the Netherlands, Germany, London and New York, underlining the economic impact of the pandemic. dollar held close to multi-year lows as investor hopes of a U.S. fiscal stimulus got a boost as President-elect Joe Biden won the Electoral College vote and U.S. lawmakers were positive about clinching a fiscal stimulus deal. USD/ a new aid package, the recovery of the U.S. economy is likely to falter. Market participants expect greater clarity regarding future bond purchases (from the Fed)," Commerzbank (DE:CBKG) analyst Daniel Briesemann said in a note.

Silver XAG= jumped 1.8% to $24.25 an ounce, platinum XPT= rose 1.4% to $1,021.18 and palladium XPD= gained 1.7% to $2,330.22.

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