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Gold set to post weekly, monthly decline on firmer dollar

Published 29/01/2021, 12:34 pm
© Reuters.
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Jan 29 (Reuters) - Gold prices were steady on Friday as investors waited for developments around a U.S. stimulus package, although the metal was on course to post a weekly and monthly decline hurt by a stronger dollar.

FUNDAMENTALS

* Spot gold XAU= was unchanged at $1,840.91 per ounce by 0058 GMT. Prices were down 0.6% for the week and 2.9% for the month. U.S. gold futures GCv1 rose 0.1% to $1,839.70.

* The dollar .DXY rose 0.2%, making gold expensive for holders of other currencies.

* The greenback has risen 0.8% for the month helped by higher U.S. Treasury yields. Higher yields on bonds make gold a less attractive investment because it pays no interest. USD/

* U.S. jobless claims fell in the latest week, while fourth-quarter gross domestic product figures met expectations. The International Monetary Fund urged that fiscal support should stay in place until an economic recovery is firmly underway even as global debt likely reached 98% at the end of 2020. A $1.9 trillion U.S. coronavirus stimulus deal proposed by President Joe Biden is yet to be passed. Global gold demand for gold fell to its lowest in 11 years in 2020, while India's consumption fell to its lowest in 26 years, the World Gold Council said on Thursday. Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD fell 0.4% on Thursday. GOL/ETF

* Silver XAG= dropped 0.7% to $26.18 an ounce, having risen 4.5% on Thursday, after some traders moved to cover short positions on rumours about a GameStop-style squeeze driven by retail investors. Silver was on track to post its best week since week ended Dec. 18, up 2.8%.

* Platinum XPT= gained 0.3% at $1,073.68 and palladium XPD= rose 0.4% to $2,344.17.

DATA/EVENTS AHEAD (GMT) 0630 France GDP Preliminary QQ

Q4 0900 Germany Unemployment Change, Rate SA

Jan 0900 Germany GDP Flash QQ SA, YY NSA

Q4 1330 US

Consumption, Adjusted

Dec

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