NEW YORK: Gold prices nudged higher on Wednesday on expectations for more support for the US economy and a dovish stance from the US Federal Reserve.
Spot gold rose 0.1% to $1,855.80 an ounce by 1:44 p.m. EST (1844 GMT), after touching its highest since Dec. 9 at $1,865.50. US gold futures settled up 0.2% to $1,859.10.
“The market has been caught between the optimism around vaccine developments and concerns around rising (COVID-19) infection rates,” Standard Chartered analyst Suki Cooper said, adding that the focus was on the FOMC meeting, Brexit and the US stimulus negotiations.
Leading US lawmakers reported substantial progress in hammering out COVID-19 relief aid as pressure mounted amid a surge in coronavirus cases in the world’s hardest hit country. “The dollar weakness and dovish expectations for the FOMC meeting have buoyed gold prices,” Cooper said.
The Federal Reserve was due to provide a playbook for its economic policy with policymakers set to conclude the final meeting of the year with investors expecting near zero interest rates and more bond-buying. “More good news on the vaccine front has the capacity to dampen gold’s comeback,” HSBC analyst James Steel said in a note.
Gold has risen more than 22% so far this year, banking on its appeal as a hedge against inflation likely due to the unprecedented stimulus unleashed in 2020.
Among other precious metals, silver gained 1.9% to $24.93 an ounce, and platinum fell 0.9% to $1,027.15.
Palladium rose 0.6% to $2,332.23.
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