Gold prices edged up on Thursday as the dollar eased and investors bet on further U.S. stimulus though President Donald Trump threatened to veto a long-awaited pandemic relief bill.
Spot gold rose 0.2% to $1,875.20 per ounce by 0722 GMT, having risen as much as 1% in the previous session. U.S. gold futures were up by 0.1% at $1,880.00.
“Gold prices are riding a near-term bull trend, propelled by a weaker dollar and a new strain of coronavirus that could derail the (economic) recovery, hinting at further stimulus ahead,” said Margaret Yang, a strategist at DailyFX.
News that Britain and the European Union were on the cusp of striking a narrow trade deal lifted the euro and British pound, pushing the dollar down.
The safe-haven metal also benefited from a more contagious coronavirus variant that prompted sweeping restrictions in Britain.
“The overnight rally leaves gold parked in the middle of its one-week range, lacking the drivers and momentum to attempt a directional move either way,” Jeffrey Halley, a senior market analyst at OANDA, said in a note.
Gold’s next move will depend on whether the fiscal stimulus situation in the United States is resolved over the next week, he added.
Rising risks from the new virus variant and surging U.S. infections have kept investors optimistic about the U.S. stimulus bill despite Trump’s threat to veto the $900 billion relief package.
Gold will move in tandem with COVID-19 developments next year, while U.S. President-elect Joe Biden’s policy on the dollar and U.S.-China relations will also determine the metal’s trajectory, DailyFX’s Yang said.
The metal may test a resistance at $1,888 per ounce, a break above which could push it to $1,904, Reuters technical analyst Wang Tao said.
Silver climbed 0.6% to $25.68 an ounce. Platinum gained 0.5% to $1,019.59 and palladium rose 0.1% to $2,325.55.
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