Gold Down, But Boosted By Hopes for Further U.S. Stimulus

Friday,   08-Jan-2021   10:38 AM (IST)

Gold was down on Friday morning in Asia but hopes for further U.S. stimulus buoyed the yellow metal as the week closes. Investors will also be looking at the U.S. jobs report, including non-farm payrolls, which will be released later in the day and forecast to show a sharp slowdown in hiring. Gold futures edged down 0.20% at $1,909.70 by 11:57 PM ET (4:57 AM GMT), but remained above the $1,900 mark. U.S. President-elect Joe Biden now has full control of Congress, thanks to Jon Ossoff and Raphael Warnock’s victory in the U.S. Senate runoff elections in Georgia earlier in the week. A Democrat-controlled Senate could see Biden push through his agenda, including more stimulus measures, with more ease. Congress’ certification of his win in the Nov. 3 presidential election against incumbent Donald Trump also gave Biden a boost. Protests by Trump supports as the certification process was underway earlier in the week saw House of Representatives Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer demand that Trump’s cabinet immediately remove him from office. Trump condemned the riot on Thursday through a video message. “A new administration will be inaugurated on Jan. 20th … my focus now turns to ensuring a smooth, orderly and seamless transition of power,” he added. Meanwhile, Federal Reserve Bank of Cleveland President Loretta Mester said she didn’t believe that the increased fiscal stimulus under Biden would mean a pull-back on monetary policy in 2021. Other Fed officials, including Chicago President Charles Evans and Atlanta’s Raphael Bostic, have said they could support reducing the pace of the central bank’s ongoing asset purchases before the end of 2021 should the economy bounce back strongly enough. The yellow metal has had a mixed start to 2021 after posting its biggest annual advance in ten years. Although tailwinds, including the rising number of COVID-19, the uncertainty over the global economic recovery and expectations of rising inflation, remain, the gains in benchmark Treasury yields during the past week weighed on non-interest-bearing gold.