PRECIOUS-Gold edges up as dollar dips on Trump threat to stimulus bill

 (Adds comments; updates prices)
    * No real resistance until $1,900 for gold - analyst
    * Trump threatens not to sign U.S. stimulus deal  
    * Interactive graphic tracking global spread of coronavirus:

    By Diptendu Lahiri
    Dec 23 (Reuters) - Gold prices inched higher on Wednesday
after President Donald Trump's threat not to sign the U.S.
pandemic relief bill triggered a drop in the dollar.
    Spot gold        was up 0.1% at $1,860.81 per ounce by 1250
GMT, while U.S. gold futures        fell 0.3% to $1,864.60 per
    Bullion has climbed about 23% so far this year and is poised
for its biggest annual gain since 2010 as central banks and
governments globally unleashed unmatched stimulus to cushion the
economic blow of the coronavirus crisis.
    "Even if Donald Trump denies to sign the bill, it is widely
expected that Biden will make it pass and therefore we do not
see any downside to gold at the moment," Natixis analyst Bernard
Dahdah said.
    Gold is seen as a hedge against inflation, caused by added
monetary flow into the economy, and benefits from low-interest
rates that reduce its opportunity cost.
    The dollar index        dropped 0.2% against rival
currencies after Trump's threat to not sign a coronavirus
recovery bill       , enhancing gold's appeal to non-U.S.
    "The market is quite optimistic about the (U.S. stimulus)
bill getting passed eventually," said Kunal Shah, head of
research at Nirmal Bang Commodities in Mumbai.    
    "The real trigger for gold would be (a) prolonged easing of
central bank balance sheets and a continued fall in (the)
dollar," Shah added.  
    A coronavirus mutation has prompted many nations to close
their doors to Britain, denting hopes of a worldwide economic
revival after the pandemic.                                     
    "On the upside, there is no real resistance until $1,900,
although the area around $1,875-$1,880 is likely to be the first
test for any recovery attempt (for gold)," ActivTrades' chief
analyst Carlo Alberto De Casa said in a note.     
    Silver        rose 0.8% to $25.31 an ounce. Platinum       
gained 0.5% to $1,007.39 and palladium        was up by 0.4%

 (Reporting by Diptendu Lahiri and Swati Verma in Bengaluru;
Editing by Alexander Smith)

Source link

Leave a Comment