2-3 minutes - Source: CNBC
Gold bullion bars are pictured after being inspected and polished at the ABC Refinery in Sydney on August 5, 2020.
DAVID GRAY | AFP | Getty Images
Gold jumped 1% on Monday on optimism around an additional U.S. stimulus bill and a weakened dollar, despite gains in the stock markets after reports that U.S. President Donald Trump could soon be discharged from the hospital.
Spot gold was up 0.8% at $1,914.60 per ounce. U.S. gold futures rose 0.7% to $1,920.20.
Optimism over fiscal stimulus in the world’s largest economy came into play after upbeat weekend comments from U.S. House Speaker Nancy Pelosi, who said progress was being made on relief legislation.
“May be there is a little skinnier deal in the horizon that Pelosi would agree to and Republican party would agree to and I think the stimulus will be a boon for the metals,” said Daniel Pavilonis, senior market strategist at RJO Futures.
A little bit of risk-on sentiment has been a negative for gold, Pavilonis said, adding that “we could see another sideways week.”
The dollar was down 0.5% against rivals, making gold cheaper for holders of other currencies. Global stocks cheered news that Trump could be discharged from hospital as soon as Monday, although outside experts warned that his case may be severe.
Trump’s COVID-19 infection has also raised uncertainties around the U.S. presidential election on Nov. 3.
“Barring a split government outcome, both administrations are likely to push through a large-scale a fiscal deal in no time that would help de-bottleneck the real rate suppression, lifting precious metals in the process,” TD Securities said in a note.
“Considering a Blue Wave would likely result in the largest package, Biden’s election odds are increasingly likely to drive gold prices in the coming month.”
Looking ahead, markets will be watching out for the release of minutes from U.S. Federal Reserve’s September meeting on Wednesday.
Among other metals, silver gained 2.7% to $24.34 per ounce, platinum rose 1.3% to $893.14 and palladium climbed 1.4% to $2,341.38.
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