Gold Rises for a Fourth Day as Platinum Surges Above $1,200

by BLOOMBERG

Gold advanced for a fourth day as the dollar weakened and investors weighed prospects for more U.S. stimulus amid rising inflation expectations. Platinum rallied to a six-year high.

Joe Biden’s administration has dedicated its first few weeks in office to spending more money on pandemic relief — and shrugged off warnings that the economy may overheat as a result. The president backed a proposal for quicker phase-outs of planned $1,400 stimulus checks, and the House aims to vote on the full bill during the week of Feb. 22. Speaker Nancy Pelosi has pledged to secure congressional passage by mid-March expiration of enhanced jobless benefits approved in the December aid package.

Bullion is holding near one-week high as bets on a fast-tracked aid package are helping to underpin market-derived inflation expectations, which are at multi-year highs, and have fanned the so-called reflation trade. On Wednesday, U.S. consumer price data is due, while Federal Reserve Chair Jerome Powell will speak on a webinar hosted by the Economic Club of New York.

“The short-term focus for the market is zeroed in on the U.S. fiscal stimulus and this may well keep gold prices supported, likewise with the easing of some greenback strength into this week,” said Jingyi Pan, market strategist at IG Asia Pte. “Powell’s speech will also be one watched ahead with any reinforcement of the low interest rate environment supportive for gold prices.”

Spot gold added 0.4% to $1,845.67 an ounce by 7:24 a.m. in London, while silver rose and palladium steadied. The Bloomberg Dollar Spot Index retreated 0.1% after dropping 0.5% Tuesday.

In other metals, spot platinum rose as much as 2.5% to $1,211.33 an ounce, the highest since 2015. The metal is expected to benefit from tight supplies, strong investment demand, and the global recovery, according to UBS Group AG, which has forecast a surge to $1,250.