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PRECIOUS-Gold jumps on weaker dollar, U.S. stimulus bets

Published 2020-10-09, 06:00 a/m
© Reuters.
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* Spot gold headed for weekly gain of 0.9%

* Silver up over 2% for the week

* Interactive graphic tracking global spread of coronavirus: https://graphics.reuters.com/world-coronavirus-tracker-and-maps/ (Updates prices)

By Sumita Layek

Oct 9 (Reuters) - Gold rose by more than 1% on Friday and was on course for a second straight weekly gain as the dollar weakened and renewed negotiations for U.S. stimulus prompted investors to buy bullion as a hedge against inflation.

Spot gold XAU= was up 1.2% to $1,915.36 per ounce by 1135 GMT, up 0.9% this week. U.S. gold futures GCcv1 gained 1.4% to $1,921.30.

"The gyrations on whether we are going to get a stimulus or not seems to be affecting gold prices; gold has rallied on huge stimulus from the U.S. Federal Reserve and the government, and if that continues, it will support gold further," said Robin Bhar, an independent analyst.

U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin resumed their talks over the coronavirus aid plan, after U.S. President Donald Trump called off negotiations earlier this week. who have a portfolio in equities, fixed income, will also try to find ways of hedging the uncertainty on the economy and the stimulus," Bhar added.

Gold has gained 26% this year, boosted by massive stimulus globally to cushion the pandemic's economic impact.

The dollar .DXY fell against rivals, amid growing bets that Joe Biden would win the U.S. presidential election and possibly offer more stimulus after that. USD/ prospect of a Democrat win boosts the incentive to hold gold as a new relief package can be assembled if the ongoing stimulus talks fall apart, said OANDA analyst Craig Erlam.

Meanwhile, gold-backed exchange traded funds added over 1,000 tonnes of bullion worth $60 billion to their stockpile in the first nine months of 2020, the World Gold Council said. XAG= rose 2.3% to $24.36 per ounce and is up more than 2% this week. Platinum XPT= gained 2.2% to $881.33 and palladium XPD= climbed 2.2% to $2,423.30.

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