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PRECIOUS-Gold edges up as weaker dollar offsets vaccine optimism

Published 25/11/2020, 08:50 pm
© Reuters.
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(Updates prices)

* Fed minutes due at 1900 GMT

* Dollar hovers close to near three-month low

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

By Diptendu Lahiri

Nov 25 (Reuters) - Gold edged higher on Wednesday after retreating in previous sessions, with a weaker dollar helping to offset a shift to equities and other riskier assets on hopes that coronavirus vaccines will spur economic recovery.

Spot gold XAU= firmed by 0.2% to $1,811.40 an ounce at 1307 GMT, having hit its lowest since July 17 at $1,800.01 on Tuesday. U.S. gold futures GCcv1 rose 0.4% to $1,811.60.

"It's clearly bargain hunting at present," said independent analyst Robin Bhar. "Prices have fallen over $150 in the past two weeks and investors are grabbing this opportunity to take positions."

The dollar index .DXY was hovering close to its lowest in nearly three months, making dollar-priced bullion cheaper to buyers with other currencies. USD/

Sunilkumar Katke, head of currencies and commodities at Axis Securities, said the weaker dollar was a good opportunity for investors who missed buying gold in March.

Analysts do not expect an immediate recovery in gold as equities power to record highs on optimism over COVID-19 vaccines and a smooth power transition in Washington. .EU MKTS/GLOB StoneX analyst Rhona O'Connell said consolidation in the gold price was likely.

"A vaccine is not a cure and the acceleration in rates of infection is a major worry, not just humanitarian but also economic. Negative interest rates will persist," she said.

Lower interest rates reduce the opportunity cost of holding non-yielding gold, which has gained about 19% this year given its status as a hedge against likely inflation spurred by the massive economic stimulus unleashed globally.

Prices should rise again as more evidence of inflation emerges, Goldman Sachs (NYSE:GS) said. were awaiting minutes of the U.S. Federal Reserve's last meeting, due to be published at 1900 GMT. other precious metals, silver XAG= was up 0.5% at $23.36 an ounce, platinum XPT= fell 0.6% to $955.78 and palladium XPD= was down 0.7% at $2,332.99.

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