Buy Silver MCX 68600—68500 Target 68910–69220 SL PAID. Gold prices looked set to post their best year since 2010 on Thursday, even as dimming prospects for increased U.S. stimulus checks and buoyant equities weighed on the metal in thin volume trade.
Spot gold fell 0.3% to $1,886.94 per ounce by 0643 GMT, but was up more than 24% for the year.
U.S. gold futures were down at 0.1% to $1,891.70.
Denting sentiment, Republican Senate Majority leader Mitch McConnell refused a quick vote on a bill to increase U.S. relief checks, saying it had “no realistic path to quickly pass the Senate.”
“The (near-term) outlook for gold hinges on what happens with the final shape of U.S. fiscal stimulus… it’s looking unlikely because McConnell isn’t budging,” said IG Market analyst Kyle Rodda.
Asian shares were set to end the year at record highs as investors pinned hopes on a swift economic recovery next year which also led the dollar to ease.
“The dollar is going to weaken quite precipitously until Q1, giving gold a clear runaway to do well right out of the gates next year,” Stephen Innes, chief global market strategist at Axi, said, adding that the metal could reach $2,000.
Unprecedented stimulus measures and low-interest rates to cushion economies from the pandemic’s blow this year have benefited gold as it is seen as a hedge against inflation.
Gold can move higher with risk assets next year as long as monetary and fiscal conditions remain accommodative, while lower yields will encourage investors to hedge riskier assets with gold, Rodda added.
Silver fell 0.9% to $26.36 per ounce but was up more than 47% this year – its best performance since 2010.
