Gold surged on Friday after US Treasury Secretary Steven Mnuchin said his agency and the US Federal Reserve had enough firepower to continue supporting the economy.
The comments came a day after Mnuchin called for several emergency loan programs to expire by the end of the year.
“The markets should be very convinced that we still have a lot of capacity,” Mnuchin told CNBC.
He also said he would speak with U.S. Senate Majority Leader Mitch McConnell and House Minority Leader Kevin McCarthy about a strategy that could be used to approach the President of the United States. House Nancy Pelosi and Senate Minority Leader Chuck Schumer.
Spot gold rose to US $ 1,873.30 an ounce on Friday.
The surge in gold “is just based on his comments,” said Bob Haberkorn, senior market strategist at RJO Futures over the phone. “When they can support it, that means there is more money in the system.”
Still, prices fell 0.77% for the week – the second week of decline – following positive news about plans developed by companies such as Pfizer Inc.
Global holdings of bullion exchange-traded funds (ETFs) – which played a crucial role in gold’s rally to a record high in August – are now at their lowest for more than two months.
While ETF investors have generally tended to take a long-term view of the market, the high cost of renewing futures contracts may have brought more short-term traders, such as hedge funds into ETFs, said Marcus Garvey, head of metals and bulk product strategy at Macquarie Group Ltd.
This has led to “faster currency” in commodities, which means faster response to changes in the outlook for gold.
Gold delivered in December rose US $ 10.90 to US $ 1,872.40 per ounce.
‧ Silver for December delivery increased from $ 0.31 to $ 24.36 per ounce and in December copper increased from US $ 0.09 to US $ 3.29 per pound.
Additional reports by AP
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