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PRECIOUS-Gold edges up after Trump offers larger U.S. stimulus

Published 16/10/2020, 01:02 am
© Reuters.
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* Dollar index gains

* U.S. weekly jobless claims rise unexpectedly

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

By Sumita Layek

Oct 15 (Reuters) - Gold prices edged up on Thursday after U.S. President Donald Trump reignited hopes of a coronavirus stimulus package before the Nov. 3 elections, but a strong dollar kept the metal's gains in check.

Spot gold XAU= rose 0.3% at $1,906.15 per ounce by 1:46 p.m. EDT (1746 GMT). U.S. gold futures GCv1 settled up 0.1% at $1,908.90.

Trump said he would agree to go higher than the $1.8 trillion that the White House has offered in coronavirus stimulus to strike a deal. focus is on renewed hopes for stimulus talks as the U.S. president keeps pushing to get a deal done and gold is ignoring the strength in the dollar," ED&F Man Capital Markets analyst Edward Meir said.

"But with the dollar as strong as it is, the upside in gold will likely be limited."

The dollar .DXY held gains against rivals, supported by U.S. Treasury Secretary Steve Mnuchin's remarks on Wednesday that a stimulus deal would be hard to reach before the election. supporting gold, U.S. weekly jobless claims unexpectedly rose last week. jobless numbers showed that we're not out of the woods yet, we still have a lot of headwinds to contend with, which points to the likelihood of more government intervention through stimulus and suppressed interest rates," said Jeffrey Sica, president and chief investment officer of Sica Wealth Management.

Gold, considered a hedge against inflation, currency debasement and uncertainty, has gained 25% this year, driven by massive global stimulus to cushion economies from the pandemic-induced slump.

"Ultimately the macro factors that have driven investors to seek the yellow metal's warm embrace will keep investment capital flowing into gold well into next year," TD Securities analysts said in a note.

Elsewhere, silver XAG= fell 0.4% to $24.19 per ounce, platinum XPT= rose 0.5% to $860.92 and palladium XPD= climbed 0.2% to $2,349.04.

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