By Barani Krishnan
Investing.com - Gold prices rose on Thursday but still finished with a weekly loss, after the twist to a U.S. coronavirus stimulus package and the dollar’s unexpected gains in recent days prevented the yellow metal from extending a three-week rally.
Benchmark gold futures for February delivery on New York’s Comex settled up $5.10, or 0.3%, at $1,883.20.
But for the holiday-shortened week ahead of Friday’s Christmas, the contract was down 0.3% by 12:56 PM ET (17:56 GMT), after rallying some $100, or 6%, over three prior weeks.
The spot price of gold, which algorithms and hedge funds use to decide the direction for futures, hovered at around $1,878, up 0.4% on the day and down 0.1% on the week.
Gold prices were thrown about this week as the dollar rebounded sharply from 2-½ year lows after the British pound crumbled on fresh Brexit woes.
Gold has also been yanked around since Sunday’s deal by U.S. Congress on a $900 coronavirus stimulus and $1.4 trillion in federal government funding. Both those packages are now in a limbo after President Donald Trump’s refusal to sign them, particularly due to his objection over a measly $600 in personal Covid-19 aid for needy Americans approved by his own Republican party.
Rival Democrats in Congress have thrown their support behind Trump in a rare show of unity with the president, while Republicans have shown no signs of acceding to the president’s demands despite his signature being required to prevent a federal government shutdown.
Gold tumbled early in the week on the dollar's strength before recovering in recent days on the stimulus drama. The rebound fell short, however, of its Friday settlement of $1,888.90, resulting in the weekly loss.
For the week ahead, “the incoming Brexit-related headlines, along with developments surrounding the coronavirus saga might infuse some volatility in the global financial market,” gold analyst Haresh Menghani said in a post on fxstreet.com. “This, in turn, might assist traders to grab some short-term opportunities.”