Gold rose more than 1% to a two-week high on Monday on expectations of fresh fiscal stimulus in the U.S.and a subdued dollar.
Spot gold prices were 1.3% higher at $1,861.26 per ounce by 10:16 a.m. EST (1516 GMT), after rising to their highest since Nov. 23 at $1,863.26 earlier. U.S. gold futures rose 1.4% to $1,865.80.
“The stimulus plan has helped stabilize the gold market because more money being pumped into the financial system is inflationary,” said Kitco Metals senior analyst Jim Wyckoff.
With pressure mounting on the U.S. Congress to help people and businesses hit hard by the pandemic, talks aimed at providing relief gathered momentum and lawmakers worked to put the finishing touches on a new $908 billion bill. Bullion is considered a hedge against inflation that could result from the large stimulus measures unleashed in 2020, gaining 22% so far this year.
Also helping gold, the dollar index hovered near a 2-1/2-year low.
“This is a seasonally strong period for gold prices and we just went through a capitalization event, in which a lot of the weaker hands in gold have been shaken out of the market,” said Daniel Ghali, commodity strategist at TD Securities.
Gold has recovered more than 5% since slumping to a five-month low on Nov. 30, with November also marking bullion’s worst month in four years, pressured by hopes of a vaccine-fuelled economic recovery.
On the technical front, the breach of the $1,850 level, which was touted as an important resistance, signals further recoveries for gold, analysts said. Bullion also shook off pressure from earlier in the session on Britain’s plan to become the first country to roll out the Pfizer/BioNTech COVID-19 vaccine this week.
Platinum was 1.5% lower at $1,039 after falling as much as 4.8% earlier.
Silver rose 1.5% to $24.52 per ounce and palladium was down 0.2% at $2,338.50.
A woman wearing a dress made of cash, Germany, 1923.
THESE are the shocking images that reveal the full horror of hyperinflation in post Great War Germany ñ when money was literally worthless. In 1923, Germany was hit by one of the worst cases of hyperinflation in history, with 4.2 trillions marks worth just one American dollar. This out-of-control inflation began somewhat mildly during World War I, as the German government printed unbacked currency and borrowed money to finance military expenditures. The strategy was to pay off the debts by seizing resource-rich territories and imposing reparations on the vanquished Allies. But when Germany lost the war and ended up with massive debts, including huge reparations to be paid to the Allies under the Treaty of Versailles. The country found themselves in economic crisis and increasingly unable to afford the hefty reparation payments.
... SEE COPY ... PIC BY NEWS DOG MEDIA ... 0121 517 0019
Reserve Your Free Step-by-Step GuideLearn Why Everyone Should Own Real Gold & Silver
INSIDE THIS INVESTMENT GUIDE YOU WILL LEARN: • How Gold & Silver can protect your savings & retirement accounts • Types of Gold & Silver products available for Home Delivery • How a Gold & Silver IRA can protect your Retirement account