Gold firms on stimulus bets, weak dollar

Gold firmed on Thursday as the dollar fell and investors clung to hopes of an eventual breakthrough in negotiations over a fresh U.S. coronavirus aid package. Spot gold was up 0.2% to $1,833.67 per ounce at 10:26 a.m. EST (1526 GMT). It earlier hit its highest since Nov. 23 at $1,843.80, but pared gains following a lower-than-expected U.S. jobless claims number.

U.S. gold futures were up 0.4% to $1,837.20.

U.S. lawmakers were unable to agree on a fresh relief package, but there were signs a $908 billion bipartisan proposal was gaining support as a negotiating tool.

Joe Biden coming to power in Washington could lead to more stimulus, said Daniel Pavilonis, senior market strategist at RJO Futures.

But ultimately, "the gold market expected a lot more stimulus" than is currently being negotiated, he added, capping bullion`s upside.

The expectations of a stimulus deal and continued optimism over COVID-19 vaccines kept the dollar index near a more than two-year low, buoying appeal for gold among investors holding other currencies.

"Stimulus talks and further dollar weakening are lending more support to gold," said StoneX analyst Rhona O`Connell in a note.

Gold, considered a hedge against inflation and currency debasement, has risen about 21% this year, benefitting from near-zero interest rates and risks of higher inflation likely to result from the massive stimulus globally to ease the economic blow from the pandemic.

Platinum hit a near eleven-month peak at $1,032 per ounce. It was last up 1% to $1,024.80.

Platinum has consolidated above $1,000 on positive global growth sentiment, with initial targets extending towards $1,040 as exchange traded fund interest drives price action on the back of forecast deficits in 2021, MKS PAMP said in a note.

Palladium fell 0.4% to $2,390.70 per ounce and silver was down 0.8% at $23.91.

The story has been taken from a news agency