Gold steady as softer dollar, stimulus hopes lend support

Gold prices steadied in early trade on Thursday as a softer dollar and progress on another U.S. coronavirus relief package countered pressure from an upbeat U.S. private payrolls data.

FUNDAMENTALS
Spot gold was steady at $1,884.67 per ounce by 0058 GMT.


U.S. gold futures were down 0.2% at $1,890.90.

The dollar index hovered around a one-week low hit in the previous session.

U.S. Treasury Secretary Steven Mnuchin on Wednesday said talks with House Speaker Nancy Pelosi made progress on COVID-19 relief legislation, and the House of Representatives postponed a vote on a $2.2 trillion Democratic plan to allow more time for a bipartisan deal to come together.

Gold, seen as a hedge against inflation and currency depreciation, has gained 24% so far this year, supported by monetary stimulus from major central banks and governments.

Latest data from ADP National Employment Report showed U.S. private employers stepped up hiring in September.

Another piece of data, however, showed U.S. gross domestic product plunged at a 31.4% annualized rate in the second quarter, the steepest drop since the government started keeping records in 1947.

European Central Bank President Christine Lagarde set the scene on Wednesday for a change of strategy that could align the ECB with the U.S. Federal Reserve, possibly including a commitment to let inflation overshoot after it has been low for too long.

Silver rose 0.2% to $23.25 per ounce, platinum was up 0.4% to $891.95 and palladium edged 0.2% higher to $2,309.07.