SINGAPORE: Gold ticked higher in Asian trade on Monday, as the metal drew support from grim US jobs data that fuelled optimism over a US stimulus deal, although gains were capped by coronavirus vaccine rollouts. Spot gold prices rose 0.2% to $1,840.65 per ounce by 0725 GMT, while US gold futures were up 0.2% at $1,843.90.
"Softer jobs growth and tighter social mobility restrictions ostensibly lower the hurdle for a policy response from (US) Congress," said Stephen Innes, chief global market strategist at financial services firm Axi. While the gold market might be disappointed with the size of the package, markets will likely take support from the bipartisan nature of the deal that suggests further compromise in the U.S Congress ahead, Innes said.
Gold is seen as a hedge against inflation that could result from large stimulus. Given increased inflation expectations, rising coronavirus cases, continued dollar weakness and a stalling US labour market, gold could test $1,900 in December, said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.
However, gold's gains were capped as Britain prepared to become the first country to roll out the Pfizer/BioNTech Covid-19 vaccine this week. Gold has resistance at $1,850 an ounce, with a close above that pivot level setting the scene for a test of the resistance line at $1,920 an ounce, Jeffrey Halley, a senior market analyst at OANDA, said in note.
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