Futures contracts for gold on Thursday were headed higher for a third straight session, helped by an abatement in the recent recovery of the U.S. dollar and a retrenchment in yields for government debt.
Commodities dealers also were reacting to the European Central Bank’s announcement on Thursday to 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 benchmark rates unchanged.
The move came ahead of the Federal Reserve’s policy meeting on next week and appeared to nudge sovereign debt yields lower, helping bullion gain further traction higher.
On Wednesday, the approval by the House of the $1.9 trillion COVID fiscal spending package that is expected to be signed into law by President Joe Biden. Meanwhile, a closely followed report on consumer inflation suggested that inflation wasn’t as hot as some investors had feared, which helped to tamp down the U.S. dollar and encourage the rise in yields, sparking a rebound in precious metals that don’t offer a coupon.
“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.
April gold on Comex
GC00,
+0.53%
GCJ21,
+0.53%
was up $9.10, or 0.5%, at $1,731.10 an ounce, following a 0.3% gain in the previous session.
Meanwhile, May silver
SI00,
+1.00%
SIK21,
+1.00%
added 27 cents, or 1%, to trade at around $26.40 an ounce, after slipping 0.2% on Wednesday.
The 10-year Treasury note
TMUBMUSD10Y,
1.502%
on Thursday was yielding around 1.49%. Bond prices rise as yields fall. Meanwhile, the U.S. dollar, as gauged by the ICE U.S. Dollar Index
DXY,
-0.22%,
was down 0.3%.
![#Cowboys score with less than a minute left to overcome late INT in their own red zone, escape woeful Texans [Video]](https://s.yimg.com/ny/api/res/1.2/UsVG6YQ1VTxGy867RAjijA--/YXBwaWQ9aGlnaGxhbmRlcjt3PTEyMDA7aD04MDA-/https://media.zenfs.com/en/aol_yahoo_sports_800/5bcdfb5de2b1e098214a32ea14abbfd0)
