Gold near 1-week high on growing prospects of US stimulus

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Dec 17:
Gold prices steadied near a one-week high on Thursday, as investors cheered progress on a U.S. fiscal stimulus deal, while the Federal Reserve‘s pledge to keep rates low until an economic recovery is secure added to the support.

FUNDAMENTALS

* Spot
gold was little changed at $1,864.36 per ounce by 0051 GMT, trading near a one-week high of $1,865.50 hit in the previous session.

* U.S.
gold futures rose 0.5% to $1,867.80.

* U.S. congressional negotiators on Wednesday were “closing in on” a $900 billion COVID-19 aid bill, including $600 to $700 stimulus checks and extended unemployment benefits, as a Friday deadline loomed, lawmakers and aides said.

* With interest rates likely to stay near zero for years to come, the Fed on Wednesday more explicitly promised to continue its bond-buying programme until “substantial further progress” in restoring full employment and hitting its 2% inflation target.

* Adding to growing signs of a slowdown in the economic recovery, U.S. retail sales fell more than expected in November.

* Market participants now await the Bank of England’s policy decision, due at 1200 GMT, where it is expected to refrain from further stimulus ahead of a possible no-deal Brexit that is likely to deepen the pandemic-ravaged economy’s problems.

*
Gold is seen as a hedge against inflation and currency debasement.

* Britain and the European Union have moved closer to sealing a new trade deal but it was still unclear if they would succeed, the bloc’s chief executive said on Wednesday.

* Silver dropped 0.3% to $25.27 an ounce and platinum fell 0.3% to $1,031.50, while palladium gained 0.3% to $2,333.83.

DATA AHEAD(GMT) 1300 U.K Bank of England’s policy decision 1330 U.S. Initial Jobless Claims w/e Dec. 12

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