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PRECIOUS-Gold hits 1-week high on U.S. stimulus bets, Fed decision eyed

Published 16/12/2020, 02:54 pm
© Reuters.
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(Updates prices)

* Moderna COVID-19 vaccine set for U.S. approval this week

* U.S Fed policy statement due at 1900 GMT

* Economic recovery hopes to keep platinum supported - analyst

* Interactive graphic tracking global spread of coronavirus: open

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

By Nakul Iyer

Dec 16 (Reuters) - Gold prices rose to a one-week high on Wednesday, building on the previous session's rally on growing prospects of further U.S. stimulus, while investors awaited the Federal Reserve's policy decision.

Spot gold XAU= rose 0.2% to $1,856.90 per ounce by 0704 GMT, after hitting its highest since Dec. 9 at $1,858.26. U.S. gold futures GCv1 rose 0.3% to $1,861.00.

"The markets are just craving anything in terms of a U.S. stimulus package and news that some bipartisanship emerged last night marginally lifted inflation expectations, benefiting gold," said IG Market analyst Kyle Rodda.

U.S. congressional leaders reported substantial progress on Tuesday after two meetings of top Democrats and Republicans to end a months-long standoff on coronavirus relief. now await the Fed's final policy statement of the year, due at 1900 GMT, where it is expected to keep interest rates pinned near zero. also expect new guidance on how long the Fed will keep up its massive bond-buying programme.

"The unlikely magic ingredient that would see gold prices fly would be if the Fed potentially entertains a yield curve control programme to keep risk-free rates low," Rodda said.

Keeping gold's gains in check, Moderna Inc's MRNA.O COVID-19 vaccine appears set for regulatory authorisation in the United States this week, buoying Asian equities. MKTS/GLOB

Autocatalyst metal platinum XPT= climbed 0.9% to $2,338.05, having hit a more than one-week high of $1,045 earlier in the session.

Expectations of an economic rebound next year should support platinum, which is largely an industrial metal, although there has been a constant supply surplus in recent years, said Harshal Barot, a senior research consultant for South Asia at Metals Focus.

Silver XAG= rose 1.2% to $24.78 an ounce and palladium XPD= gained 0.6% to $1,042.51.

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