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Gold steadies as traders assess US stimulus, Brexit deals

Gold could receive a lift once the US stimulus impasse is resolved. (File image)

Gold prices steadied and most base metals were higher in holiday-thinned trading, with investors assessing the latest developments of a covid-19 relief package in the US and the final announcement of a post-Brexit trade deal.

Spot gold rose slightly by 0.3% to $1,879.40 per ounce by 12:40 p.m. EST, while US gold futures were up 0.2% to $1,882.70 per ounce.

On Thursday, the UK and European Union finalized their historic post-Brexit trade agreement, averting the threat of an acrimonious breakup.

Meanwhile, House Republicans blocked Democrats’ attempt to meet President Donald Trump’s demand to pay most Americans $2,000 to help weather the coronavirus pandemic. Democrats will try again with a roll call vote on a new bill next week.

“Gold prices are benefiting from a Brexit trade deal breakthrough that paved the way for a weaker dollar,” said Edward Moya, a senior market analyst at Oanda Corp.

Gold’s next move will depend on whether the fiscal stimulus situation in the US is resolved over the next week, said Jeffrey Halley, another senior market analyst at Oanda.

Investors are looking past Trump’s demand for changes to US pandemic relief, expecting that stimulus spending will come sooner or later.

Bullion, largely considered a hedge against inflation, has risen about 25% so far this year amid the massive stimulus unleashed around the globe. This puts the precious metal on course for its biggest annual gain in a decade.

(With files from Bloomberg)