|Delayed - 06/23 11:43:50 pm|
Gold firms as Mnuchin rekindles U.S. stimulus hopes
|11/20/2020 | 12:00pm|
(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)
By Sumita Layek