New year’s gold prices began to peak above the eight-week high on Monday, as Covid-19 spike issues and expectations for tougher restrictions contributed to a safe metal bid.
Spot gold rose 1.1% to $ 1,919.11 per ounce before 0553 GMT, after peaking since November 9 at $ 1,925.05, while U.S. gold futures climbed 1.6% to $ 1,925. Doubts about a rapid global economic recovery arose after an industry study showed that the pace of expansion in China’s industrial sector had slowed in December.
Data for the United States and Europe are expected later in the day. Potential for weaker data as Covid-19 predicts livelihoods in U.S. and Europe supports gold, said Dominic Schnider, head of forex products and APAC at UBS Wealth Management in Hong Kong . The dollar eased, making gold cheaper for other holders.
Gold prices rose after the British prime minister blocked tighter loops, while Japan said it would consider announcing a state of emergency in the country’s capital. Investors will also monitor Tuesday’s run-off elections in the U.S. state of Georgia that will determine Senate control.
“Gold will go higher if the Democrats win the Senate, establishing freedom to engage in a more progressive fiscal policy,” said Nicholas Frappell, global general manager at ABC Bullion. Support factors from 2020 will continue to push gold higher in the first half of the year, and the success of vaccination programs will also determine prices, he said.
Other commodities including oil, iron ore, and copper also began on 2021 on a strong note as a vaccine release and further fiscal support hopes to stimulate demand and raise prices. A summary of the most recent meeting of the U.S. Federal Reserve is expected Wednesday. Silver gained 2.2% to $ 26.93 an ounce. Platinum rose 1.4% to $ 1,083.42 and palladium rose 0.1% at $ 2,451.78.