Gold heads for best close in six weeks

Gold headed for the highest close in six weeks after President Donald Trump signed a $900bn coronavirus stimulus package, pumping more state funds into the world’s top economy. Silver surged.

The haven built on a run of four weekly gains following the breakthrough on the package, which Trump had initially declined to endorse amid a dispute on the size of checks to support households amid the pandemic. The dollar fell.

Bullion is set to post the first monthly gain since July after a run of losses prompted by the development of effective coronavirus vaccines. Over 2020 as a whole, gold has benefited from a steady weakening of the US currency since it peaked in March, as well as from unprecendented fiscal and monetary stimulus.

Spot gold rose as much as 0.9 per cent to $1,900.31 an ounce, and traded at $1,886.29 at 7.4am in London. That would be the highest close since Nov 16. Silver for immediate delivery rallied as much as 3.6 per cent to $26.7714 an ounce. The Bloomberg Dollar Spot Index fell as much as 0.3 per cent.

The relief package will likely be the last major legislation signed by Trump, whose re-election hopes were dashed in large part due to his handling of the pandemic. President-elect Joe Biden has said he will push for even more stimulus after taking office early next year.