Gold prices end lower as stocks rally, steady dollar buffet bullion

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Gold futures finished lower Monday, after back-to-back gains, giving up an early rise in a choppy trading session as investors deemed some firmness in the U.S. dollar and a global stock rally sufficient headwinds for bullion.

Bullion had briefly scored a modest bounce toward its highest level in about six weeks intraday after President Donald Trump signed a coronavirus relief package over the weekend, ending a brief standoff between the White House and Congress.

Gold is viewed as a hedge against devaluation of dollars and large deficits being run up by governments to curb the harmful economic effects of the COVID-19 pandemic.

Bullion has benefited over the year from economic uncertainties created by COVID-19, but has been struggling to hold on to key levels near $1,900, with the rollout of experimental vaccines and remedies that have been rapidly authorized by governmental health bodies to tackle the pandemic.

Risk markets scored a boost on Monday after the signing of the relief bill, as the coronavirus pandemic continued to surge across the country and the rest of the world.

The legislation was seen as a support for gold prices because government spending is seen putting pressure on the dollar. However, much of the move in gold from COVID aid measures may have been priced into the metal, some experts said.

A neutral dollar, tilting slightly higher in the session, eventually helped to pressure gold lower. A firmer dollar tends to make assets priced in the commodity less appealing to buyers overseas.

The dollar was flat at 90.323, as measured by the ICE U.S. Dollar Index DXY.

Gold for February delivery GCG21, -0.34% GC00, -0.34% shed $2.80, or 0.1%, to settle at $1,880.40, after posting a 0.3% weekly decline on Thursday and snapping a streak of three consecutive weekly gains, FactSet data show.

Silver for March delivery SIH21, +2.00%, meanwhile, which trades at times as both an industrial and a precious metal, got a lift from hope of a better economic backdrop from the passage of relief aid. Silver prices climbed 63.1 cents, or 2.4%, to settle at $26.539 an ounce, following a weekly slump of 0.3% on Thursday.

Metals trading last week settled an hour earlier on Thursday, at 12:30 p.m. Eastern, and remained closed in observance of Christmas on Friday. Markets will be closed this Friday in observance of New Year’s Day.

Elsewhere on Comex, March copper HGH21, +0.29% added less than a penny, or 0.2%, to settle at $3.571 a pound, after the industrial metal booked a 1.9% weekly loss on Thursday.

January platinum PLF21, +0.76%  finished at $1,043.10 an ounce, a gain of $14.20, or 1.4%, after a weekly decline of 1.4%. March palladium PAH21, -0.12% added $5.90, or 0.3%, to settle at $2,351.80 an ounce, following a weekly decline of 1.1%.