Gold rises on weak dollar, stimulus hopes

Published On: October 21, 2020Categories: Alternative Investments1.4 min read

Gold rose on Wednesday morning, boosted by a weak dollar and hopes for a U.S. stimulus ahead of the Nov. 3 presidential election

Gold was up on Wednesday morning in Asia, boosted by a weak dollar and the prospect of the U.S. Congress passing the latest stimulus measures ahead of the Nov. 3 presidential election.

Gold futures were up 0.38% at $1922.75. The dollar was down on Wednesday morning.

The gap between the Republicans and Democrats seemed to decrease after President Donald Trump indicated on Tuesday that he was willing to accept a stimulus package with a larger price tag, saying, “I want to do it even bigger than the Democrats.”

House of Representatives Speaker Nancy Pelosi added to hopes that the stimulus measures would be passed by Congress, saying, “I hope so. That’s the plan,” for an agreement to be reached the following week. Pelosi will continue talks with Treasury Secretary Steven Mnuchin later in the day.

However, with Republicans still opposed to the measures’ price tag, it remains to be seen whether both parties will reach a consensus.

The Federal Reserve struck a positive note, with Chicago Federal Reserve Bank President Charles Evans saying that the current rise in U.S. COVID-19 cases may not dent the recovery too much, remaining “reasonably optimistic” that unemployment will fall to 5.5% by the end of 2021. Evans’ colleagues at the Fed called for more fiscal support to complement unprecedented monetary aid, and the central bank is due to release its ‘Beige Book’ economic survey later in the day.

Swiss gold exports to China and India decreased in September, importing record volumes of bullion from Hong Kong instead and exporting the yellow metal to the U.K., according to customs data. Other data showed that holdings in SPDR Gold Trust fell 0.23% to 1,269.93 tons on Tuesday.

About the Author: Jonathan Adams

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