Gold Gains On Stimulus Hopes, Covid-19 Concerns
Gold prices rose slightly on Wednesday to hover near a one-week high amid growing hopes for further U.S. stimulus and renewed concerns over the economic toll of the coronavirus pandemic.
Spot gold rose half a percent to $1,862.40 per ounce, while U.S. gold futures were up 0.6 percent at $1,866.25.
The dollar fell across the board as optimism about a Brexit trade deal, hopes of effective coronavirus vaccines and the growing prospect of more U.S. fiscal stimulus helped support risk appetite.
U.S. Senate Majority Leader Mitch McConnell vowed Tuesday that Congress would not adjourn for the year until the $748 billion relief deal is clinched.
European Commission President Ursula von der Leyen said that there is a ‘path’ to a Brexit deal and the next few days will be “decisive”.
Hospitals across the United States are ramping up Covid-19 vaccinations as a second vaccine developed by Moderna appears poised to receive emergency-use authorization by the U.S. Food and Drug Administration.
Meanwhile, a number of European countries have tightened restrictions ahead of Christmas. Germany entered a strict lockdown today, while France is introducing a night-time curfew.
The Netherlands has entered a five-week lockdown. An adviser to Italy’s health ministry has called for coronavirus restrictions to be drastically tightened to avoid a “national tragedy”.
In the U.K., government officials are meeting today to discuss whether to change or scrap the Christmas rules relaxation.
Markets await the outcome of a FOMC meeting later today to see whether the Fed will step up monetary policy accommodation by focusing more asset purchases on the long end of the Treasury yield curve.