February 28, 2021
(Bloomberg) — Gold headed for its biggest weekly gain since July and copper climbed as...

(Bloomberg) — Gold headed for its biggest weekly gain since July and copper climbed as Joe Biden tightened his grip on the race for the White House, while investors also weighed prospects for further Federal Reserve stimulus.Bullion broke out of a narrow trading range seen over the past month as uncertainty over the election and renewed stimulus hopes boosted demand for the haven. Biden, who needs a win in one more state to be elected president, edged ahead of Donald Trump in Georgia and also expanded his lead in Nevada.Trump meanwhile said the election was being stolen from him, though presented no evidence of widespread voting irregularities. The President’s campaign peppered courts with legal complaints, aimed at slowing or pausing counting of the votes, which were generally unsuccessful.Fed Chair Jerome Powell opened the door to a possible shift in the central bank’s bond purchases in the coming months, saying that more fiscal and monetary support is needed. The Fed kept its stimulus steady at its meeting this week, but a Republican Senate hamstringing government aid efforts may force it to step up and fill the gap soon.“You could argue precious metals also gained from concerns about how a contested election plays out,” said Marcus Garvey, head of metals strategy at Macquarie Group Ltd.Spot gold lost 0.1% to $1,948.04 an ounce by 10:17 a.m. in London, trimming this week’s gain to 3.7%. The Bloomberg Dollar Spot Index was little changed, on course for a weekly slump.In base metals, copper turned higher as European trading got underway, and was last up 0.9% at $6,915.50 a ton in London. It’s heading for a weekly advance on the back of recent dollar weakness, while zinc reversed an earlier loss to reach the highest since May 2019.While a contested election ending with a divided government would be the least bullish of all possible outcomes for commodities markets, copper could still hit fresh highs next year on the back of faltering supply and robust demand, Morgan Stanley analysts Susan Bates and Marius van Straaten said in a note.“Once initial volatility has passed, we expect increased focus on the market fundamentals, which remain broadly supportive for base metals,” the analysts wrote. “Copper still features the strongest fundamentals on a tepid supply growth outlook through 2021.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Source link