Gold futures gained for a third session on Thursday, aided by a weaker U.S. dollar and slightly lower bond yields.
Commodity dealers also reacted to the European Central Bank’s announcement that it would accelerate its bond purchases under its pandemic emergency purchase program, or PEPP, while leaving the “envelope” for total purchases unchanged at €1.85 trillion. The ECB also left its policy interest rates unchanged.
The move came ahead of the Federal Reserve’s policy meeting on next week and nudged sovereign debt yields lower, helping bullion gain further traction.
Meanwhile, President Joe Biden was set to sign Democrats’ $1.9 trillion stimulus bill into law Thursday afternoon, the White House said. The House approved the bill on Wednesday following the Senate’s OK last week.
Gold’s trade on Thursday followed a report on consumer inflation on Wednesday suggesting that inflation wasn’t as hot as some investors had feared, which helped to ease bond yields and weaken the U.S. dollar.
“The dollar’s decline following the approval of the $1.9 trillion stimulus package and weaker than expected inflation has lifted the gold price and removed some of the recent fears about bullion,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades, in a Thursday research note.
The analyst said that gold may face its first test of its current “bullish wave” at around $1,760, which is viewed as a resistance point for the asset to overcome.
The 10-year Treasury note TMUBMUSD10Y, 1.611% on Thursday was yielding around 1.53%. Meanwhile, the U.S. dollar, as gauged by the ICE U.S. Dollar Index DXY, 0.48%, was down 0.4%.
A weaker dollar can make gold more compelling for overseas buyers.
April gold on Comex GC00, -1.22% GCJ21, -1.22% picked up 80 cents, or less than 0.1%, to settle at at $1,722.60 an ounce, well off its intraday high at $1,738. The trade for bullion follows a 0.3% gain in the previous session.
Meanwhile, May silver SI00, -2.15% SIK21, -2.15% added 6.3 cents, or 0.2%, to end at $26.193 an ounce, after slipping 0.2% on Wednesday. Silver also finished far below its intraday peak at around $26.55 an ounce.
Elsewhere on Comex, May copper HG00, -0.99% HGK21, -0.99% jumped by 10.65 cents, or 2.6%, to settle at $4.139 a pound. April platinum PLJ21, -1.61% PL00, -1.61% tacked on 50 cents, or less than 0.1%, to settle at $1,202.30 an ounce, while June palladium PA00, -0.32% PAM21, -0.32% finished at $2,341.60 an ounce, up$48.40, or 2.1%.