Gold Back in Play, Edging Up on Stimulus Hopes Despite Dollar Rebound
Investing.com
Published Jan 07, 2021 04:25PM ET
By Barani Krishnan
Investing.com - Gold prices rose Thursday as investors began making a beeline for the yellow metal despite a rebound in the dollar, as the win of the U.S. Senate by President-elect Joe Biden’s Democratic Party opened the path for stimulus that would benefit gold.
Gold for February delivery on New York’s Comex settled up $5, or 0.3%, at $1,913.60 an ounce, after rising to almost $1,930 earlier in the session.
That was a rebound from Wednesday, when the benchmark U.S. gold futures contract lost nearly $46, or 2%, on profit-taking and after a surge in bond yields that helped the dollar recover from near three-year lows.
The U.S. 10-Year note rallied again on Thursday, hitting highs not seen since March, while the Dollar Index, which pits the greenback against six major currencies, rose to a one-week high.
“Gold is consolidating between $1,900 and $1,950 but eventually the prospects of more monetary and fiscal stimulus should have the bullish trend reassert itself,” said Ed Moya, analyst at New York’s OANDA.
Analysts think gold futures, which hit mid-$1,900 levels earlier this week before Wednesday’s profit-taking, was poised for a new run-up that could possibly take the precious metal to $2,000 and beyond as investors buy in as a hedge against Biden’s fiscal measures.
Biden, whose term begins Jan. 20, has hinted that he wants at least two stimulus packages in 2021 to override the economic malaise expected to continue from the coronavirus pandemic. His first order of business might be to push out $2,000 checks to most Americans.
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