Gold Rallies on Weaker Dollar

Gold Rallies on Weaker Dollar

Gold rallies on weaker dollar and growing speculation that U.S. President Donald Trump was indicating stimulus package talks had resumed. This movement has put the yellow metal on pace for second straight weekly gains.

The White House and House Democrats have been at loggerheads over terms of a multitrillion-dollar stimulus bill to provide relief to segments of the economy hard hit by the coronavirus and associated lockdowns. Donald Trump cut off talks earlier this week. Stimulus efforts are considered bullish for gold.

Gold futures rose 0.2% Thursday to settle at $1,895.10 an ounce on Comex. The December contract fell 0.7% in the first four days of the week. The yellow metal lost 4.2% in September. Gold is up almost $400 — or 24% — so far this year as investors have flocked to gold because of uncertainty from the coronavirus pandemic and the economy. The December contract is currently up over $30 an ounce to $1,925.40 and the DG spot price is $1,920.90.

A price just north of the $1,900 threshold is currently the resistance level for the trendline down from the record high reached in early August, according to a technical analysis from FX Street.

Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi spoke Thursday regarding a stimulus measure. The sides are split over the scope of a possible package, with the White House seeking just stimulus checks and bailouts for airlines and small businesses, while Democrats seek a more comprehensive agreement. Federal Reserve Chairman Jerome Powell had said earlier this week that more stimulus was needed to sustain an economic recovery.

Uncertainty over the economy, the election and Trump’s prognosis after he was diagnosed with COVID-19 a week ago put a floor under prices, making gold a more attractive hedge investment.

U.S. initial jobless claims fell slightly last week but remained high at 840,000, according to data released Thursday by the Labor Department. Pandemic-related lockdowns have sent millions of Americans into unemployment.

The virus has killed 1.06 million people worldwide and sickened 36.4 million. About 21% of the cases — and 20% of the deaths — are in the U.S. The country has 7.6 million cases, more than any other nation.

Silver futures slipped 2 cents Thursday to settle at $23.88 an ounce on Comex. The December contract decreased 0.6% in the first four days of the week. The most active contract plunged 18% in September after gaining 18% in August and soaring 30% in July. Currently the December contract is $24.705 an ounce and the DG spot price is $24.57.

Spot palladium increased 1% to $2,414.00 an ounce and gained 3.8% in the first four days of the week. Spot platinum fell 0.2% Thursday to $869.00 an ounce and is down 2.2% so far this week. The DG spot price for platinum is currently $898.80 and palladium is $2,458.50.


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