London: Gold rose to an over one-week high on Thursday as the dollar weakened on hopes of coronavirus vaccine roll-outs, while investors also weighed the possibility of more US stimulus. Spot gold rose 0.2 per cent to $1,835.37 per ounce by 04:02am. (US gold futures were up 0.5 per cent at $1,838.60.)
Optimism over a US stimulus deal and vaccine progress favoured riskier assets and pushed the US dollar to a near two-and-a-half year low. Stimulus talks, especially over a bipartisan agreement, will support gold in the short-term as it would weaken the US dollar, said Michael Langford, executive director at corporate advisory and consultancy firm AirGuide.
Vaccine boost is already priced in
Positivity over a COVID-19 vaccine could have limited impact on bullion going forward as much of that optimism is priced in by markets, he added. Health experts in the US welcomed Britain's emergency approval of Pfizer Inc's vaccine, in a sign that US regulators may soon follow suit.
"The key drivers of gold - real interest rates and the dollar - are expected to remain soft without concrete economic progress worldwide or an effective vaccine readily available to the masses," Avtar Sandu, senior commodities manager at Phillip Futures, said in a note.