Gold futures are settling the Thursday trading session at their highest levels in two weeks, marking their third consecutive gain. Gold prices are finding support on optimism over fiscal stimulus in the US, as well as a sliding greenback. While some experts think the gold rally has deflated, some think this could be a buying opportunity heading into 2021.
January gold futures tacked on $13.10, or 0.72%, to $1,843.30 per ounce at 19:38 GMT on Thursday on the COMEX division of the New York Mercantile Exchange. The yellow metal is on track for a weekly gain of about 3%, adding to its year-to-date increase of more than 21%.
Silver, the sister commodity to gold, endured choppy trading toward the end of the trading week, but it will settle higher. February silver futures picked up $0.125, or 0.52%, to $24.205 per ounce. The white metal is poised for a weekly climb of nearly 4%, lifting its 2020 surge to beyond 35%.
Gold is betting on the latest round fiscal stimulus and relief in Washington. Although US lawmakers failed to reach an agreement on a renewed package, there were signs that both Republicans and Democrats were close to establishing a $908 billion bipartisan proposal. House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer issued a joint statement requesting bipartisan effort to additional coronavirus relief measures. Senate Majority Leader Mitch McConnell noted that reaching a compromise for another COVID-19 package would be possible.
The details are scarce, but so far reports suggest that the legislation does not include $1,200 stimulus checks. It is also way below the $2.2 trillion plan this past fall.
Financial markets are signaling that they are confident that Joe Biden will spend more and help push forward a lot more stimulus. This would add to inflation fears and a weaker greenback.
The US dollar has been battered this year since it hit a 17-year high in March. The US Dollar Index, which gauges the greenback against a basket of currencies, fell 0.47% to 90.69, from an opening of 91.06, on Thursday. The index is poised for another weekly loss of 1.4%. Year-to-date, it is down 6%. A lower buck is good for dollar-pegged commodities because it makes it cheaper for foreign investors to purchase.
In other metal markets, January copper futures were flat at $3.4805 a pound. January platinum futures surged $29.70, or 2.93%, to $1,041.80 per ounce. February palladium futures cratered $89.20, or 3.7%, to $2,319.00 per ounce.