Gold increases as dollar slides

Gulf Today Report

Gold rose on Friday as the dollar concern outweighs delay of US coronavirus package.

Spot gold rose 0.1% to $1,837.21 per ounce by 05:31 GMT. US gold futures gained 0.2% to $1,841.50.

Margaret Yang, a strategist at DailyFx "the correlation between gold and dollar has returned because markets have more or less priced in the vaccine optimism."

A Federal Reserve is likely to serve as a catalyst in helping gold with its descending trend. A large US fiscal stimulus and the success of vaccine could also help. 

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The dollar index has declined by 0.2%, it traded close to 90.5, its lowest since April 2018. It has made gold cheap for other currency holders.

According to data released on Thursday, US jobless claims has reached a three-month high, indicating that COVID-19 infections and lack of additional fiscal stimulus are affecting the economy.

On the technical front, gold remains neutral in a narrow range of $1,828 to $1,846 per ounce, said Wang Tao, a technical analyst.

Gold serves as a shield against inflation and currency debasement.

Gold prices are expected to grow in 2021 due to accommodative rates and a weaker dollar.