Yesterday, gold prices rose 1% due to the weak dollar, and headed towards achieving the second consecutive weekly gain, as the attractiveness of the yellow metal increased as a hedge against inflation due to renewed optimism about a new United States aid package to mitigate the repercussions of the Corona virus.
Investors have been increasing bets that Democrat presidential candidate Joe Biden is more likely to win the November 3 USA election, and that Democrats could also win the Senate.
"Market participants are travelling with the idea that a new round of USA fiscal stimulus is coming regardless, the uncertainty is more around whether it will happen before the election and how big it will be", said Rodrigo Catril, senior FX strategist at National Australia Bank in Sydney.
Since the American currency had been spiralling over a possible pandemic stimulus package lately, Friday's downturn of the US Dollar was largely catalysed by a remark from the US House Speaker Nancy Pelosi who had been quoted saying earlier in the day that she would resume negotiations with the US Treasury's Mnuchin late on the day. The dollar meanwhile slid 0.7% as expectations grew for a Biden win, making gold cheaper for those holding other currencies.
"Overall, investors seem to be focusing more on the increasing odds of a Biden win and what that might imply for a stimulus package after the election", said Marshall Gittler, head of investment research at BDSwiss. The dollar index - which measures the greenback against six currencies - weakened as much as 0.53 per cent during the session. The New Zealand dollar likewise recouped Thursday losses made after another dovish signal from the Reserve Bank of New Zealand and was last up 0.3% at $0.6602. It is down nearly 0.7% this week.
Sterling stabilized as prospects for a Brexit deal appeared to improve, with Britain giving it a 66% chance of success.
Silver rose 0.4 percent to $23.93 per ounce, platinum gained 0.6 percent to $867.06, and palladium was up 0.3 percent to $2,379.29. Market analysts said the latest purchases by traders have accelerated gold prices. The Russian rouble has also gained about 1% for the week.
"USD/CNY will move closer to USD/CNH's current level of 6.74", said Commonwealth Bank of Australia analyst Kim Mundy. The midpoint of its onshore trading band is fixed at 0115 GMT and trade begins a quarter of an hour later.