Gold heads for sixth weekly gain on stimulus outlook
Gold headed for a sixth weekly advance, the longest run since August, as investors focused on the prospect for more stimulus. They will also be watching for Friday’s jobs report, which is forecast to show a sharp slowdown in hiring.
The two Democratic wins in Georgia’s Senate runoffs this week give President-elect Joe Biden full control of Congress, potentially paving the way for him to push his legislative agenda forward. While campaigning in the state, he vowed that $2,000 stimulus checks would be sent out “immediately” if his party won.
Federal Reserve Bank of Cleveland President Loretta Mester said she didn’t believe ramped up fiscal stimulus under Biden would pave the way for a pull-back on monetary policy this year. Other central bank officials such as Chicago President Charles Evans and Atlanta’s Raphael Bostic have said they might support reducing the pace of the Fed’s ongoing asset purchases before the end of 2021 if the economy bounces back strongly enough.
Meanwhile, House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer demanded that President Donald Trump’s cabinet immediately remove him from office and accused him of inciting the mob that stormed the US Capitol. Trump, in a video message on Thursday night, condemned the riot and said he would prepare for the administration of Biden.
Bullion’s had a mixed start to the year after posting the biggest annual advance in a decade. While there’s still plenty of tailwinds — a raging pandemic, uncertainty over the economic recovery, rising inflation expectations, to name a few — gains in benchmark Treasury yields this week weighed on the non-interest bearing asset.
Spot gold rose 0.1% to $1,916.01 an ounce at 8:14 a.m. in Singapore and is up 0.9% this week. Silver, platinum, and palladium were all little changed. The Bloomberg Dollar Spot Index steadied after surging 0.6% on Thursday.