Gold firms on lacklustre dollar

Bengaluru — Gold prices edged higher on Monday, helped by a softer dollar while investors looked forward to speeches by Federal Reserve policymakers due this week for further clues on the US central bank’s approach to inflation.

Spot gold rose 0.2% to $1,953.37 per ounce by 5.34am. US gold futures inched 0.1% lower to $1,960.50. The dollar index was down 0.1% against its rivals, making gold more attractive for buyers holding other currencies.

Investors are now eyeing speeches by Fed committee members, including chair Jerome Powell, who will appear before congressional committees later this week.

“The focus on Jerome Powell will be how much he is going to try to sway the senate to provide more stimulus, more stimulus in the US could lead to a weaker US dollar and that would be positive for gold,” said Stephen Innes, chief market strategist at AxiCorp.

Gold has surged about 29% this year as governments and central banks worldwide released unprecedented global stimulus measures to revive their economies from coronavirus-induced slump.

Gold “remains in a range-trading mode, with resistance at $1975.00, and support at $1935.00 an ounce,” Jeffrey Halley, a senior market analyst at Oanda said in a note.

Also keeping the floor under gold were concerns emerging from a resurgence in Covid-19 cases globally that prompted major cities from Denmark to Greece to announce restrictions again, while worldwide cases crossed 30.78-million.

Gold, however, could struggle getting to $2,000 this year due to the improving economic situation and benefits of a vaccine coming into play, AxiCorp’s Innes added.

Meanwhile, data from the Commodities Futures Trading Commission showed that speculators raised their net long position in Comex gold by 10,622 contracts to 165,251 in the week ended September 15. Among other precious metals, silver ticked up 0.3% to $26.85 per ounce, platinum gained 1% to $936.84 and palladium was 1.1% higher at $2,381.86.

Reuters