Gold futures settled higher on Wednesday, extending gains from previous session amid continued optimism about a fiscal stimulus in the U.S.
Worries about economic growth due to continued spikes in coronavirus cases across the world contributed as well to the increased demand for the safe-haven asset.
However, gold futures pared some gains following the dollar regaining some lost ground. The dollar index, which eased to 90.13 in the Asian session, rose to 90.40 later on in the session. It moved up further post monetary policy announcement from the Fed, rising to 90.57.
Prices drifted lower post settlement, after the U.S. Federal Reserve announced its monetary policy. The Fed said it would keep interest rates near zero, and will continue its bond purchases till the economy makes “substantial further progress.”
Gold futures for February ended up $3.80 or about 0.2% at $1,859.10 an ounce, after hitting a high of $1,869.50 earlier.
Silver futures for March ended higher by $0.408 at $25.052 an ounce, while Copper futures for March settled at $3.5590 per pound, gaining $0.0145.
In economic news, retail sales in the U.S. showed a steep drop in the month of November, according to a report released by the Commerce Department on Wednesday.
The Commerce Department said retail sales tumbled by 1.1% in November following a revised 0.1% dip in October. Economists had expected retail sales to slip by 0.3% compared to the 0.3% increase originally reported for the previous month.
On the stimulus front, U.S. Senate Majority Leader Mitch McConnell vowed Tuesday that Congress would not adjourn for the year until the $748 billion relief deal is clinched.
European Commission President Ursula von der Leyen said that there is a ‘path’ to a Brexit deal and the next few days will be “decisive”.
Hospitals across the United States are ramping up Covid-19 vaccinations as a second vaccine developed by Moderna appears poised to receive emergency-use authorization by the U.S. Food and Drug Administration.
Several European countries have imposed tighter restrictions ahead of Christmas. Germany entered a strict lockdown today, while France is introducing a night-time curfew.