NEW YORK: Gold edged higher in early New York trade on Friday after US Treasury Secretary Steven Mnuchin signalled that negotiations on stimulus measures will continue, boosting the metal's appeal as a hedge against likely inflation. Spot gold rose 0.3% to $1,871.99 per ounce by 11:50 a.m. EST (1650 GMT), but was down 0.8% for the week. US gold futures rose 0.6% to $1,871.80.
Mnuchin said he and White House Chief of Staff Mark Meadows would be speaking on Friday with Republican congressional leaders on negotiations with Congress on more economic support.
"The thought of stimulus talks moving forward once again has supported gold as we realise central bank liquidity and fiscal stimulus measures continue to be a driving force behind this market," said David Meger, director of metals trading at High Ridge Futures.
Bullion has dipped about 5% since positive reports on Covid-19 vaccines from Pfizer and Moderna in the past 12 days. Gold has mainly benefited this year on the back of damage to economies from the pandemic and the resultant global stimulus.
But gold will remain supported as "vaccines will take months and months to become well distributed enough to be effective and the US government is going to continue to be stalemated," said Jeffrey Christian, managing partner of CPM Group.
Investors pulled $4 billion from gold, the biggest outflow ever, amid a rush for riskier assets last week, BofA said on Friday. Silver rose 0.7% to $24.26 per ounce. Platinum eased 0.7% at $944.99, while palladium shed 0.2% to $2,321.49.
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