ANL 12.54 Decreased By ▼ -1.01 (-7.45%)
ASC 12.70 Decreased By ▼ -0.62 (-4.65%)
ASL 13.46 Decreased By ▼ -0.56 (-3.99%)
BOP 8.38 Increased By ▲ 0.02 (0.24%)
BYCO 5.96 Decreased By ▼ -0.18 (-2.93%)
FCCL 17.08 Decreased By ▼ -0.53 (-3.01%)
FFBL 24.05 Decreased By ▼ -0.85 (-3.41%)
FFL 9.97 Decreased By ▼ -0.28 (-2.73%)
FNEL 9.25 Decreased By ▼ -0.55 (-5.61%)
GGGL 14.00 Decreased By ▼ -1.30 (-8.5%)
GGL 27.05 Decreased By ▼ -2.45 (-8.31%)
HUMNL 5.73 Decreased By ▼ -0.17 (-2.88%)
JSCL 15.00 Decreased By ▼ -1.00 (-6.25%)
KAPCO 31.60 Decreased By ▼ -0.45 (-1.4%)
KEL 3.22 Increased By ▲ 0.05 (1.58%)
MDTL 2.09 Decreased By ▼ -0.12 (-5.43%)
MLCF 32.75 Decreased By ▼ -1.64 (-4.77%)
NETSOL 90.21 Decreased By ▼ -5.29 (-5.54%)
PACE 4.10 Decreased By ▼ -0.15 (-3.53%)
PAEL 20.51 Decreased By ▼ -0.92 (-4.29%)
PIBTL 7.25 Decreased By ▼ -0.35 (-4.61%)
POWER 6.39 Decreased By ▼ -0.21 (-3.18%)
PRL 11.95 Decreased By ▼ -0.74 (-5.83%)
PTC 8.80 Increased By ▲ 0.05 (0.57%)
SILK 1.17 Decreased By ▼ -0.08 (-6.4%)
SNGP 37.70 Decreased By ▼ -0.98 (-2.53%)
TELE 14.85 Decreased By ▼ -1.03 (-6.49%)
TRG 77.68 Decreased By ▼ -4.05 (-4.96%)
UNITY 22.90 Decreased By ▼ -0.80 (-3.38%)
WTL 2.03 Decreased By ▼ -0.02 (-0.98%)
BR100 4,381 Decreased By ▼ -20.35 (-0.46%)
BR30 16,863 Decreased By ▼ -630.48 (-3.6%)
KSE100 43,233 Decreased By ▼ -1.32 (-0%)
KSE30 16,718 Increased By ▲ 20.28 (0.12%)

Coronavirus
LOW Source: covid.gov.pk
Pakistan Deaths
28,761
824hr
Pakistan Cases
1,286,453
43124hr
0.98% positivity
Sindh
476,494
Punjab
443,379
Balochistan
33,491
Islamabad
107,848
KPK
180,254
Markets

Gold gains as US stimulus prospects weigh on dollar

  • Bullion is considered a hedge against inflation and currency debasement that can result from widespread stimulus.
20 Jan 2021

Gold prices rose on Wednesday as expectations for a massive US stimulus to help the world's largest economy recover from the coronavirus jolt bolstered bullion's appeal as an inflation hedge and pressured the dollar.

Spot gold gained 0.5% to $1,848.30 per ounce by 0239 GMT. US gold futures added 0.4% to $1,847.30.

Janet Yellen, US President-elect Joe Biden's Treasury Secretary nominee, at her confirmation hearing on Tuesday urged lawmakers to "act big" on coronavirus relief spending, adding that the benefits outweigh the expenses of a higher debt burden.

"Given the very dovish approach from Yellen as well as Biden's stance towards fiscal stimulus, gold is responding to the idea of higher inflation expectations," said Howie Lee, an economist at OCBC Bank.

Although in the near term, gains in gold will be limited due to higher yields and some dollar strength, he added.

The dollar index eased further from a four-week high hit earlier in the week, while most US Treasury yields fell after Yellen said that tax cuts enacted in 2017 for large corporations should be repealed.

Lower Treasury yields reduce the opportunity cost of holding non-yielding bullion.

Biden will be sworn into office on Wednesday and investors will be focused on his $1.9 trillion stimulus package plan to boost the economy and speed up the vaccine distribution against COVID-19, which has claimed 400,000 deaths in the country.

Bullion is considered a hedge against inflation and currency debasement that can result from widespread stimulus.

"Gold at $2,000 is still achievable, probably by the mid of second quarter, when a good amount of people get inoculated and there is so much cash in the system with demand almost coming back to normal, people will start looking at inflation very closely," Lee said.

Among other precious metals, silver climbed 0.9% to $25.42 an ounce. Platinum rose 1.2% to $1,096.23 while palladium gained 0.4% to $2,361.79.

We love hearing your feedback, please help us improve by answering these few survey questions

Comments

Comments are closed.