(Reuters) – Gold prices rose on Thursday as progress on the U.S. fiscal stimulus deal weakened the dollar, with the metal drawing further support from a promise by the Federal Reserve to keep interest rates low until a gain beyond.
Spot gold climbed 0.4% to $ 1,872.20 an ounce before 0745 GMT, after hitting a more than week high of $ 1,873.76 earlier in the session. U.S. gold futures rose 0.9% at $ 1,875.50.
U.S. lawmakers closer to an agreement on fiscal stimulus are backing gold, although markets are likely to be disappointed with package size and are unlikely to back down. gold downward trend seen over the past few months, said Ilya Spivak, DailyFx money strategist.
U.S. conference negotiators rallied Wednesday over details of a $ 900 billion COVID-19 aid bill that was expected to include $ 600- $ 700 incentive measures and extended unemployment benefits. , pushing the dollar to a pool of more than two years.
The Fed has made it clearer that it will continue its bond buying program to make “further significant progress” in restoring full earnings and meeting its 2% inflation target.
“The market may have read in what the Fed was saying as a pre-promise that they would pursue a quantitative rebate and took support from that,” Spivak said, adding that the metal was still aware of a position that Fed was so strong on the size and tenure of bond purchases.
Investors are now awaiting the Bank of England’s policy decision, payable at 1200 GMT, where it is expected to stop further stimulus.
Inflation is now expected to take a heavy toll to push the dollar lower and inflation interest rates higher, which would push for a higher gold vector, said Stephen Innes, a global company’s chief market strategist Axi finances in pounds.
Silver rose 1.4% to $ 25.70 an ounce. Platinum gained 1.4% to $ 1,049.17 and palladium rose 0.7% at $ 2,343.13.
Reporting by Nakul Iyer in Bengaluru; Edited by Subhranshu Sahu and Sherry Jacob-Phillips