Gold firms as Mnuchin rekindles U.S. stimulus hopes

By Sumita Layek (Reuters) - Gold edged higher on Friday after U.S.

Reuters November 21, 2020 00:06:38 IST
Gold firms as Mnuchin rekindles U.S. stimulus hopes

Gold firms as Mnuchin rekindles US stimulus hopes

By Sumita Layek

(Reuters) - Gold edged higher on Friday after U.S. Treasury Secretary Steven Mnuchin signalled that negotiations on stimulus measures will continue, boosting the metal's appeal as a hedge against likely inflation.

Spot gold rose 0.3% to $1,871.99 per ounce by 11:50 a.m. EST (1650 GMT), but was down 0.8% for the week. U.S. gold futures rose 0.6% to $1,871.80.

Mnuchin said he and White House Chief of Staff Mark Meadows would be speaking on Friday with Republican congressional leaders on negotiations with Congress on more economic support.

"The thought of stimulus talks moving forward once again has supported gold as we realise central bank liquidity and fiscal stimulus measures continue to be a driving force behind this market," said David Meger, director of metals trading at High Ridge Futures.

Bullion has dipped about 5% since positive reports on COVID-19 vaccines from Pfizer and Moderna in the past 12 days. Gold has mainly benefited this year on the back of damage to economies from the pandemic and the resultant global stimulus.

But gold will remain supported as "vaccines will take months and months to become well distributed enough to be effective and the U.S. government is going to continue to be stalemated," said Jeffrey Christian, managing partner of CPM Group.

Investors pulled $4 billion from gold, the biggest outflow ever, amid a rush for riskier assets last week, BofA said on Friday.

"While the macro backdrop remains supportive, the key downside risk stems from physical demand and ETP (exchange-traded products) holdings," said Standard Chartered analyst Suki Cooper in a note.

"Buyers still appear to view price dips below $1,860/oz as attractive entry levels, and prices have held up well given the size of ETP outflows."

Silver rose 0.7% to $24.26 per ounce. Platinum eased 0.7% at $944.99, while palladium shed 0.2% to $2,321.49.

(Reporting by Sumita Layek in Bengaluru; Editing by Frances Kerry and Marguerita Choy)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.