Gold Rates On Course To Log Worst Week In Over A Month

Central banks worldwide have rolled out massive stimulus and slashed interest rates to near-zero to counter the economic damage from the COVID-19 pandemic.

Gold Rates On Course To Log Worst Week In Over A Month

Gold prices have climbed more than 20% so far this year

Gold prices edged higher on Friday as the dollar retreated and hopes for more US stimulus measures resurfaced, although the precious metal was on track to post its steepest weekly contraction since August. Spot gold was up 0.3 per cent at $1,873.83 per ounce at 0740 GMT (1:0 pm in India). But prices are down about 4 per cent for the week pressured by a broadly stronger greenback.

US gold futures rose 0.1 per cent to $1,879.20 per ounce.

The dollar index was off its two-month peak but was on track for its best week since early-April, up 1.5 per cent, making gold more expensive for holders of other currencies.

"With the data front quiet, it appears that investors want to stay nimble and hedged by leaving their money in dollar, rather than moving to precious metals or US bonds," said Jeffrey Halley, a senior market analyst at OANDA.

Investors also grew hopeful after a lawmaker on Thursday said Democrats in the House of Representatives were working on a $2.2 trillion novel coronavirus stimulus package that could be voted on as soon as next week.

Federal Reserve policymakers, including chair Jerome Powell, made multiple public appearances this week calling on the US government to provide more fiscal support.

Gold prices have climbed more than 20 per cent so far this year as central banks worldwide rolled out massive stimulus and slashed interest rates to near-zero to counter the economic damage from the COVID-19 pandemic.

Given that the coronavirus situation has not improved and interest rates are lower, gold is still bullish in the longer term, said Brian Lan, managing director at dealer GoldSilver Central in Singapore.

"Support level for gold lies around $1,845 and resistance at $1,900."

Silver edged up 0.1 per cent to $23.32 per ounce and platinum rose 1 per cent to $856.93. Both metals are on track for their worst week since mid-March.

Palladium gained 0.4 per cent to $2,235.55 per ounce.