NEW YORK: Gold rose on Friday headed for a second straight weekly gain as investors bet that a new US Covid-19 relief package was imminent. Spot gold advanced 0.3% to $1,839.90 per ounce at 1:59 p.m. EST (1859 GMT), having earlier dipped as much as 0.6%. US gold futures settled up 0.3% to $1,843.60.
"We still believe the stimulus package will get put forth and that will continue to be the underlying support behind gold and silver moving forward," said David Meger, director of metals trading at High Ridge Futures. He added the stalling of the plan in the US Congress had prompted an initial pullback in gold.
Gold has been under some pressure after reaching close to the $1,875 level earlier this week amid a slight bounce in the dollar off recent lows, Meger said. Gold's latest gains came despite a stronger greenback, with the dollar index headed for its first weekly gain in four.
US lawmakers, facing mounting pressure from weak employment data and surging coronavirus infections, sought more time to hammer out an agreement on a stimulus package.
"You're going to see gold move higher next year, but this year, it will be fairly choppy going into year end," said Chris Gaffney, president of world markets at TIAA Bank.
Considered a hedge against inflation and currency debasement, gold has gained more than 21% this year, helped by massive amounts of stimulus to support pandemic-hit economies.
"We will get a stimulus deal by the end of the month and the US Federal Reserve will maintain its very loose monetary stance, and that should help underpin gold into 2021," said Michael Hewson, chief market analyst at CMC Markets UK. Silver rose 0.1% to $23.97 per ounce. Palladium fell 0.4% to $2,322.07 per ounce and platinum declined 1.4% to $1,012.46.