Gold prices were gaining some ground on Wednesday after President Donald Trump threatened not to sign a pandemic relief bill in the United States, causing the dollar to fall.
At 10:56 GMT, spot gold was up 0.3% at $ 1,865.65 an ounce, while US gold futures were stable at $ 1,870.90.
The bullion has advanced about 23% so far this year and would record its highest annual gain since 2010, as central banks and governments around the world issued unprecedented stimuli to mitigate the economic impact of the coronavirus crisis.
“The market is very optimistic about the passage … of the bill,” said Kunal Shah, head of research at Nirmal Bang Commodities. “The real trigger for gold would be a prolonged easing of central bank balance sheets and a sustained decline in the dollar,” he explained.
The dollar index was down 0.3% after Trump’s threat not to sign a coronavirus recovery bill, increasing the appeal of gold to non-US investors.
“A sensation and uncertainty has been fueled after President Trump’s announcement,” said StoneX analyst Rhona O’Connell. “At first glance, it seems that the possibilities of inflation growth fell, but that was overshadowed by the uncertainties of a delay in the stimulus, which is needed for economic recovery,” he said.
A mutation of the coronavirus has led many nations to close their doors to Britain, dampening hopes for a global economic revival after the pandemic.
In other precious metals, silver was up 1.3% at $ 25.45 an ounce. Platinum was up 1.2% at $ 1,013.55 and palladium was up 0.4% at $ 2,323.77.