NEW YORK: Gold rose one percent in early trade in New York to its highest in over a week on Wednesday as investor optimism that a US coronavirus aid package will be announced before the Nov. 3 presidential elections pressured the dollar and bolstered bullion’s appeal as an inflation hedge.
Spot gold jumped 1% to $1,924.73 per ounce by 1:46 p.m. EDT (1746 GMT), after touching its highest since Oct. 12 at $1,931.01 in earlier trade. US gold futures settled up 0.7% at $1,929.5.
“Nancy Pelosi had a Tuesday deadline. Well, now it’s been pushed down to Friday. Knowing that, people think a deal might get done in the near future, so they’re starting to accumulate gold,” said Michael Matousek, head trader at US Global Investors.
White House Chief of Staff Mark Meadows said the biggest sticking point remains funding for state and local governments, but added that progress has been made toward a coronavirus relief deal.
Gold, considered a hedge against inflation, currency debasement and uncertainty, has gained more than 26% this year, driven mainly by unprecedented levels of global stimulus to cushion economies from the coronavirus-induced slump.
Looking ahead, a Reuters poll predicted that while gold may average less than $2,000 next year as a record rally slows, prices could still touch new highs.
Elsewhere, silver rose 1.9% to $25.10 per ounce, platinum gained 2% to $888.12 and palladium inched up by 0.1% to $2,400.22.
Platinum and palladium could gain on a tentative recovery in the auto sector, the survey showed.
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