By Barani Krishnan
Investing.com – Gold prices dipped Friday as the battered dollar rebounded from 2-½ lows. But that didn’t stop the yellow metal from posting a third straight weekly rise from gains accumulated on bets that the U.S. Congress will soon pass another coronavirus fiscal relief.
Printing more money at the expense of inflation has always been a prime ingredient for boosting commodity prices, and most natural resource markets were up this week on talk of the impending coronavirus stimulus, as well as the Federal Reserve’s pledge to buy more bonds to help the pandemic-struck economy.
But it wasn’t the same everywhere. US equity markets fell hard on Friday, barely holding to their weekly gain, as stock dabblers seemed to tire from the “it’s coming soon” pledges of lawmakers on Congress and headline writers about the prospect of stimulus — rather than an actual deal.
Commodity investors, however, dug their heels in, despite the delay in the relief agreement.
rose 1.5% on the day and about 5% on the day.
Gold barely sold off and was down less than $ 17 from Thursday’s peak of nearly $ 1,902 an ounce.
At Friday’s settlement, on New York’s Comex settled at $ 1,888.90, down just 1.50, or 0.1% .
For the week, though, the benchmark gold futures contract rose 2.5%. It was the third straight weekly gain for the contract, which has risen $ 108, or 6%, in that period.
“Risk appetite over the past few days has been fueled on optimism Congress would finally deliver a coronavirus relief bill,” said Ed Moya, analyst at New York’s OANDA. “Some investors that bought the rumor don’t have the patience to wait for the actual bill to get finalized and are closing out of positions.”
“Gold appears unfazed … and should eventually stabilize above the $ 1900 level next week,” Moya added.
TD Securities concurred with that view, citing the Fed’s decision on Wednesday to buy at least $ 80 billion per month of Treasury securities and $ 40 billion per month of agency mortgage-backed securities in a bid to provide maximum employment to Americans and price stability to the economy.
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