BENGALURU • Gold climbed to a six-week high yesterday, driven by news that United States congressional leaders had reached an agreement on a Covid-19 aid package, while lockdowns in Britain soured appetite for riskier assets and added to the metal’s support.
Spot gold rose 0.9 per cent to US$1,896.56 an ounce by 0745 GMT, having earlier hit its highest since Nov 9 at US$1,906.46.
US gold futures gained 0.8 per cent to US$1,904.20.
The US$900 billion (S$1.2 trillion) stimulus deal reached on Sunday comes as the pandemic accelerates, infecting more than 214,000 people in the US each day.
“Now that we’ve got fiscal stimulus behind us, gold has enough momentum to close above US$1,900 by year end and it could climb up to US$1,925,” said Axi chief global market strategist Stephen Innes, adding that dovish central bank policies signalled last week were also supportive.
The Fed last week vowed to keep funnelling cash into financial markets and keep rates low until a US economic recovery is secure.
Aiding gold, Asian stocks slipped as Britain’s Health Minister suggested tighter curbs in London and south-east England might stay for some time to counter a new coronavirus strain.
Gold has once again regained its safe-haven status as lockdowns have changed sentiment in the broader market, which looked past the pandemic and into a recovery next year instead, said CMC Markets chief markets strategist Michael McCarthy.
Silver rose 4.4 per cent to US$26.91 an ounce, having hit its highest since Sept 16 at US$27.38 earlier in the session.
Mr Innes said: “Silver’s industrial demand is ‘bulletproof’ from the lockdowns as export markets remain open and demand could get another boost from US President-elect Joe Biden’s push towards clean energy.”
Mr Biden’s policies to fight climate change are supportive of silver, which is used in solar panels.
Platinum rose 0.1 per cent to US$1,036.87 and palladium fell 0.3 per cent to US$2,353.50.