Gold Gains on Weaker Dollar as Historic Brexit Trade Deal Awaits
Bloomberg
Published Dec 23, 2020 09:33PM ET
Updated Dec 23, 2020 10:27PM ET
Gold Gains on Weaker Dollar as Historic Brexit Trade Deal Awaits
(Bloomberg) -- Gold advanced as the dollar held a decline and investors await details of a post-Brexit trade accord.
The U.K. and the European Union are on the verge of unveiling an historic agreement, with negotiators putting the finishing touches to a compromise on fishing rights and an announcement is expected Thursday morning. The accord will formally complete Britain’s separation from the bloc more than four years after the 2016 referendum.
“Gold prices are benefiting from a Brexit trade deal breakthrough that paved the way for a weaker dollar,” said Oanda Corp. senior market analyst Edward Moya. The metal could see further gains if the U.S. stimulus impasse is resolved, and investors are also watching the Georgia senate races, where a blue wave could still happen and “do wonders” for gold prices, he said.
Investors are looking past President Donald Trump’s demand for changes to U.S. pandemic relief, expecting that stimulus spending will come sooner or later. House Speaker Nancy Pelosi seized on Trump’s call for larger individual checks and said the House would try to pass this additional measure during a pro forma session on Thursday. A gauge of the dollar retreated 0.1% after a 0.4% decline on Wednesday.
On the virus front, the U.K. reported nearly 40,000 new cases on Wednesday, the most since the pandemic began, and the government sent more areas of the country into its toughest level of restrictions. A vaccine developed by Chinese pharmaceutical firm Sinovac Biotech Ltd. was found to be more than 50% effective in a trial, though researchers delayed releasing more information at the request of the company.
Spot gold advanced 0.3% to $1,877.71 an ounce at 10:03 a.m. in Singapore, up 24% this year to head for the biggest annual gain in a decade. Silver climbed 1.2%, while platinum rose 0.5% and palladium was little changed.
©2020 Bloomberg L.P.
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