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Gold Cools after 3-Day Run-up; Seals Best Week in Four

CommoditiesDec 04, 2020 02:19PM ET
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By Barani Krishnan

Investing.com - Gold prices consolidated on Friday after a three-day run-up, ending with their best week in four as investors hedging against the tumbling dollar steadfastly backed the yellow metal amid renewed emphasis for a US Covid-19 fiscal relief bill.

Gold for February delivery on New York’s Comex settled Wednesday’s trade down $1.10, or 0.1%, at $1,840 an ounce.

For the week, though, the benchmark gold futures contract gained almost $52, or nearly 3%. It was the yellow metal’s best week since the week ended Oct. 30 and erased a significant portion of last week’s near 5% loss, which was the biggest weekly plunge since July.

The spot price of gold, which reflects real-time trades in bullion, was down $5.21, or 0.3%, to $1,835.76 by 1:45 PM ET (18:45 GMT). For the week, bullion rose 2.7%.

Gold is emerging from one of its most brutal sell-offs ever after dynamic breakthroughs in Covid-19 vaccines and their potential availability before Christmas caused a run on money in safe-havens.

The yellow metal lost about 6% of its value in November, its most for a month since 2016 and fell into $1,700 territory. Investors have in recent weeks directed money mostly into stock markets and other risk assets such as oil, as those witnessed an epic rally amid the notion that vaccines and therapeutics would soon bring an end to the spread of the coronavirus.

Despite the continued emphasis on risk, gold as a haven is rallying again on talk of a new U.S. Covid-19 stimulus effort, which triggered a plunge instead in the dollar, the alternative trade to the yellow metal. The Dollar Index was down more than 1% to a six-year low of 90.47.

The U.S. Congress originally passed in March the Coronavirus Aid, Relief and Economic Security (CARES) Act, dispensing roughly $3 trillion as paycheck protection for workers, loans and grants for businesses and other personal aid for qualifying citizens and residents.

In the past few months, however, Democrats in Congress have been locked in a bitter debate with Republicans in the Senate on a successive relief plan to the CARES Act. The dispute has basically been over the size of the next stimulus as thousands of Americans, particularly those in the airlines sector, risked losing their jobs without further aid.

The stalemate was finally broken last week after a bipartisan group of Democrats and Republicans proposed a $908 billion relief bill, which the two sides have been negotiating since.

Gold Cools after 3-Day Run-up; Seals Best Week in Four
 

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Comments (4)
Anderson Figueiredo
Anderson Figueiredo Dec 06, 2020 4:24PM ET
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Is a true. Market game. As a chinese fable says: "This can be luck or bad luck. But it can be luck." Gold is worth more than money. As John Pierpont Morgan-JP Morgan once said: " GOLD is money, everthing else is credit".
Kaung Myat Myanmar
Kaung Myat Myanmar Dec 04, 2020 10:53PM ET
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Bear strong ok?
Alan Rice
Alan Rice Dec 04, 2020 7:55PM ET
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1Oz. Au = 40+ bbl Brent. WOW !!
Alan Rice
Alan Rice Dec 04, 2020 2:58PM ET
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The problems with Gold: Dead people dont care for it.It won't Love You back.You can't eat it.You can't breath it instead of Oxygen. It won't cure You when you get sick or assist you when you get old.Others ??
Brian Zarb
Brian Zarb Dec 04, 2020 2:58PM ET
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Alan, just don't talk if your gonna say nonsense..
Francesco Lucchesi
Francesco Lucchesi Dec 04, 2020 2:58PM ET
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so do dead people care about shares then? what rubbish
Viktor Koldamov
Viktor Koldamov Dec 04, 2020 2:58PM ET
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there are three commodities that are the most important ones and gold is non of them. They are: time, knowledge and experience.
 
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