(Bloomberg) -- Gold declined from a two-week high as investors assessed renewed concerns over the progress of stimulus talks among U.S. lawmakers.
The Democratic and Republican lawmakers working on a compromise pandemic relief plan delivered a more detailed summary of their proposal Wednesday but haven't yet resolved the deadlock over a business liability shield and aid to state and local governments. The dollar gained as U.S. stocks slid from all-time highs Wednesday, while Treasury yields advanced, eroding demand for the non-interest-bearing metal.
Gold's rebound earlier this week was “predicated on the fact that they're going to get some kind of stimulus deal,” Bob Haberkorn, senior market strategist at RJO Futures, said by phone. “The stimulus feels further out today than it did before, and that's causing traders exiting the gold market due to the apparent holdup.”
Spot gold declined 1.7% to $1,839.23 an ounce at 4:28 p.m. in New York, after touching the highest since Nov. 23 on Tuesday. Futures for February delivery fell 1.9% to settle at $1,838.50 on the Comex. Silver dropped 2.6%, while platinum and palladium fell. The Bloomberg Dollar Spot Index rose 0.1%.
Gold's drop below support levels at $1,845 to $1,850 intensified the selling, according to Tai Wong, head of metal derivatives trading at BMO Capital Markets. Still, “decent buying under $1,840” has “stanched the bleeding for the moment,” he said.
Bullion is still heading for the biggest annual gain in a decade amid unprecedented amounts of stimulus to prop up economies. Top central banks are embarking on fresh waves of bond-buying, with the European Central Bank expected to increase its purchase plans when it meets on Thursday.
“The gold price is likely to close 2020 with a notable plus, despite the sizable losses in autumn,” Carsten Fritsch, an analyst at Commerzbank AG, said in a note. “We do not expect a change in the ultra-expansionary monetary and fiscal policy despite the upcoming vaccinations” for the coronavirus, he said.
| Read more: |
|---|
©2020 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
