Gold Steady as Fiscal Stimulus Hopes Offset by Positive Economic Data

Gold prices are trading mostly unchanged early on Thursday as a weakness in the US dollar and hopes the coronavirus relief package were offset by a better than expected ADP private payrolls report. At the time of writing, GOLD is trading at a little above $1,893.

Gold prices strengthened as the US dollar index fell to a one-week low on Wednesday. The dollar, which shares a negative correlation with the precious metal, continues to trade close to this level for now.

Discussions between US Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi on the updated $2.2 trillion financial aid package appear to be making progress and could soon be approved by both parties. Hopes for more fiscal stimulus are supporting the safe haven appeal of gold, with prices having strengthened by around 24% so far this year due to measures already rolled out by central banks and governments around the world.

However, the yellow metal prices came under pressure following the release of the ADP report in the previous session, which revealed an increase in hiring by private employers during the month of September. Employment in the private sector rose by 749k from August to September, raising hopes for economic recovery following the pandemic-related lockdowns.