Gold edges higher on US stimulus hopes; set for worst week in six

By Eileen Soreng

(Reuters) - Gold inched higher on Friday on renewed hopes of more U.S. stimulus measures, though the bullion was on track for its biggest weekly decline in more than a month pressured by a stronger dollar.

Spot gold rose 0.1% to $1,869.47 per ounce by 0341 GMT. But on a weekly basis, prices are down 4.1% so far.

U.S. gold futures were down 0.4% to $1,870.30.

The dollar index was on track for its best week since early-April, up 1.5%, making gold more expensive for holders of other currencies.

"The resurgence of the U.S. dollar has been a headwind for all precious metals. Also weighing on the outlook for gold has been question marks on the next U.S. stimulus package and whether or not there'll be an agreement there," said Lachlan Shaw, head of commodities research at National Australia Bank.

Democrats in the U.S. House of Representatives are working on a $2.2 trillion coronavirus stimulus package that could be voted on as soon as next week, a key lawmaker said on Thursday.

U.S. Federal Reserve policymakers, including chair Jerome Powell, made multiple public appearances this week calling on the U.S. government to provide more fiscal support.

Central banks worldwide have rolled out massive stimulus and slashed interest rates to near zero to counter the economic damage from the COVID-19 pandemic, helping gold, considered a hedge against political and economic uncertainties, climb over 20% this year.

The number of Americans filing new claims for unemployment benefits unexpectedly increased last week, underpinning views that the economic recovery in the world's largest economy was running out of steam was.

Silver fell 0.6% to $23.07 per ounce and platinum rose 0.6% to $854.13. Both metals are on track for their worst week since mid-March.

Palladium edged 0.2% higher to $2,229.92 per ounce.

 

(Reporting by Eileen Soreng in Bengaluru; editing by Uttaresh.V and Rashmi Aich)