Gold companies as Biden win depresses dollar, raises hopes of stimulus

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Gold prices strengthened on Monday, supported by a weaker dollar and hopes for further coronavirus stimulus under US President-elect Joe Biden.Spot gold rose 0.3% to $ 1,956.57 an ounce at 3:19 a.m. GMT. On Friday it hit $ 1,960.13, the highest since September 17.

US gold futures rose 0.3% to $ 1,956.60 an ounce.

“The prospect of further stimulus keeps gold strong and has pushed the dollar lower,” said Howie Lee, an economist at OCBC Bank. The dollar index hit a 10-week low on Monday.

“This could be the start of a longer bull run (for gold). ”

Democrat Biden crossed the threshold for the 270 electoral college votes required for victory on Saturday. Republicans appear to have retained control of the Senate, although the final makeup may not be clear until the second round of voting in Georgia in January.

“A divided Senate would suggest that it will be difficult to push through these (fiscal stimulus measures). So there’s probably still a bit of hesitation, ”said ANZ analyst Daniel Hynes.

“But that will likely see the Federal Reserve play with more monetary stimulus. ”

Unprecedented money printing and low interest rates around the world have set gold on track for its best year in a decade, given its appeal as a hedge against inflation and currency degradation.

As the economic backdrop is fueled by the pandemic, investors will continue to see low interest rates and a weaker U.S. dollar, which should help gold perform relatively well, Hynes added.

Global coronavirus infections topped 50 million on Sunday, according to a Reuters tally.

Technically, spot gold could reach $ 1,975, after erasing resistance at $ 1,951, according to Reuters technical analyst Wang Tao.

Silver rose 0.7% to $ 25.77 an ounce. Platinum gained 1.2% to $ 899.49, while palladium fell 0.4% to $ 2,479.81.

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