Gold advanced as investors weighed the prospects of a US spending package and the possibility of further action from the Federal Reserve at its last meeting of the year, against progress on the rollout of vaccines.
A bipartisan group of lawmakers delivered details of a $908 billion relief package, splitting it into two parts in recognition of deep differences over state aid and a liability shield for employers. With Joe Biden now confirmed as president by the Electoral College, leaders in Congress need to find a way to get one or both parts through the House and Senate before the last of the relief provisions from earlier stimulus expire at the end of the year.
Bullion’s path in recent weeks has been dominated by developments on vaccines and prolonged stimulus talks in the US, with prices set for the first quarterly loss since 2018. Still, the metal may get some support after the Fed meets on Tuesday and Wednesday this week, with markets expecting fresh guidance on asset purchases. In addition, the haven may get a boost from fresh anti-virus curbs being rolled out in major economies including Germany and the UK.
“Prices are looking vulnerable again but should once again be saved by the Fed,” Edward Moya, senior market analyst at Oanda, said. “Economic scarring will undoubtedly make it easier for the Fed to continue to provide more accommodation and that could make many traders want to jump back in.”
Spot gold rose as much as 0.4 per cent to $1,835.17 an ounce and was at $1,832.75 at 11.39am in Singapore, after a 0.7 per cent drop on Monday. The precious metal remains about 20 per cent higher this year after hitting a record in August. Silver climbed 0.8 per cent, platinum added 0.1 per cent and palladium advanced 0.3 per cent. The Bloomberg Dollar Spot Index was flat after losing 0.2 per cent on Monday.
The first Covid-19 shots were administered by US hospitals on Monday, an initial step in a drive to immunise millions. At the same time, New York is headed towards a full shutdown if hospitalisations continue to rise, Governor Andrew Cuomo warned.
Separately, London will be placed under England’s toughest curbs from Wednesday, the same day Germany starts a hard lockdown.