BHP hires former Australian state leader for Washington role
Dominic Perrottet, the former leader of New South Wales, will serve as a US government and external affairs liaison.
Gold prices rebounded from a five-month low earlier this week as progress in US stimulus discussions burnished the metal’s appeal as a safe-haven asset.
On Tuesday, top economic officials urged Congress to provide more help for small businesses to cope with the impact of the pandemic, while there was also growing support for a $1.4 trillion spending bill.
Spot gold rose 0.7% to $1,827.09 per ounce by 11:30 a.m. EST Wednesday, the highest in more than a week. US gold futures also advanced 0.6% to $1,830.20 per ounce in New York.
Meanwhile, as rising stimulus hopes raised gold’s appeal for other currency holders, the dollar held near a two-and-a-half year low.
Gold registered its worst monthly performance in four years in November, hurt by optimism over a vaccine-led economic rebound
“We’re one step closer to the next stimulus package; that has weakened the dollar, eroding the currency and supporting commodity prices across the board, including gold and silver,” David Meger, director of metals trading at High Ridge Futures, told Reuters.
Bullion, which has risen 20% so far this year, tends to benefit from widespread stimulus measures as it is widely viewed as a hedge against inflation and currency debasement.
“We saw gold recapture the $1,800 level and a lot of that has to do with the weakening dollar trade,” Edward Moya, senior market analyst at OANDA, told CNBC. “The unwind of the gold trade has run its course and we are likely to see more efforts from the US Congress to support the economy.”
Also supporting gold, equities slipped after data showed US private payrolls increased less than expected in November, casting doubt over a rapid economic recovery.
Nonetheless, gold registered its worst monthly performance in four years in November, hurt by optimism over a vaccine-led economic rebound. The United Kingdom on Wednesday became the first country to approve Pfizer-BioNTech’s covid-19 vaccine for emergency use.
The long-term outlook for gold remains bullish given the chain of events, beginning with the stimulus, that support the inflation narrative.
“The bottom was in for gold now and we see prices north of $2,000 next year,” predicted Daniel Ghali, a commodity strategist at TD Securities.
“Gold’s actually now in a new regime with vaccines a likely catalyst for higher inflation expectations as the economy recovers, supporting gold longer term, especially amid lower real rates,” Ghali added.
Analysts at Goldman Sachs expect gold to break out of the current narrow trading range and soar through 2021 as the recession gives way to higher inflation, forecasting that it could reach as high as $2,300 per ounce.
(With files from Reuters)
