NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

PRECIOUS-Gold rises on U.S. stimulus plans, dovish Fed stance

Published 15/01/2021, 02:26 pm
© Reuters.
XAU/USD
-
XAG/USD
-
GC
-
SI
-
PA
-
PL
-
US10YT=X
-

(Updates prices)

* Gold's price action has consolidated -analyst

* Powell sees no reason to alter Fed's accommodative stance

* Platinum up more than 3% so far this week

* Interactive graphic tracking global spread of coronavirus: https://tmsnrt.rs/3mvcUoa

By Sumita Layek

Jan 15 (Reuters) - Gold ticked up on Friday as prospects of a substantial U.S. pandemic relief package boosted the metal's appeal as an inflation hedge, while the Federal Reserve's dovish monetary policy stance also supported prices.

Spot gold XAU= rose 0.2% to $1,850.16 per ounce by 0715 GMT, while U.S. gold futures GCv1 eased 0.2% to $1,848.60.

"The stimulus is going to be bullish for asset markets and with the Fed chair quashing any prospects of raising interest rates or dialling down bond buying anytime soon, gold is supported," said Jeffrey Halley, a senior market analyst at OANDA.

But the price action in gold has consolidated and it is not showing any signs of trying to break out to the upside, Halley said.

U.S. President-elect Joe Biden unveiled a $1.9 trillion stimulus package proposal on Thursday to jump-start the economy and accelerate coronavirus vaccinations. Reserve Chairman Jerome Powell on Thursday said there is no reason to alter the central bank's highly accommodative stance with the U.S. economy still far from its inflation and employment goals. monetary policy adds pressure on government bond yields and benefits non-yielding gold.

"Gold's upside looks constrained amid rising yield and buoyant risky assets. However, a weaker U.S. dollar, stimulus expectations and depressed real interest rates should remain supportive," ANZ analysts said in a note.

Benchmark 10-year Treasury yields US10YT=RR eased after touching a 10-month high earlier in the week. US/

"Short-term headwinds aside ... if inflation expectations start to increase meaningfully and fast, gold will again become attractive. We expect gold prices to break above $2,000 again," said Harshal Barot, a senior research consultant for South Asia at Metals Focus.

Silver XAG= fell 0.8% to $25.34 an ounce. Platinum XPT= fell 1.9% to $1,097.50, but was up more than 3% so far this week, while palladium XPD= shed 0.7% to $2,392.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.