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Money News

Gold eyes best week since July on easing dollar, U.S. elections

(Reuters) - Gold rose on Friday, set to post its best week since July, as the dollar weakened and increasing chances of a Joe Biden victory in the U.S. presidential election boosted hopes for a larger coronavirus relief bill.

FILE PHOTO: A gold bar is pictured on display at Korea Gold Exchange in Seoul, South Korea, August 6, 2020. REUTERS/Kim Hong-Ji/File photo

Spot gold rose 0.1% to $1,949.81 per ounce by 11:01 a.m. EST (1601 GMT), on track for a 3.9% weekly gain, the most since late July. U.S. gold futures rose 0.1% to $1,949.10.

“A devaluation of the U.S. dollar has driven gold prices to six-week highs, also some safe-haven demand amid the uncertainty of the presidential elections and rising COVID cases,” Kitco Metals senior analyst Jim Wyckoff said.

“The market is factoring in a Biden victory, (which) will lead to more government stimulus programmes and that could introduce some problematic price inflation down the road and also deflate the value of (the) dollar.”

Gold, considered a hedge against inflation and currency debasement, has risen 28% this year on the back of massive global stimulus to help coronavirus-hit economies.

Making gold cheaper for holders of other currencies, the dollar held near a two-month low.

Democrat Joe Biden edged closer to the White House, while Republican President Donald Trump falsely claimed the election was being “stolen” from him, even as votes were still being counted in key states.

“Although the continued U.S. election uncertainty is taking away the prospect of an immediate stimulus package, markets believe that one would eventually be coming, and so that may be why gold is moving up,” ED&F Man Capital Markets analyst Edward Meir said.

“We have a decent shot of getting to $2,000 an ounce by month-end if not earlier.”

Data earlier showed U.S. nonfarm payrolls increased by 638,000 jobs last month, while the unemployment rate fell to 6.9% from 7.9% in September.

Silver gained 0.3% to $25.40 an ounce. Platinum eased 0.2% to $891.33 and palladium jumped 2.2% at $2,429.16.

Reporting by Sumita Layek in Bengaluru; editing by Jonathan Oatis

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