Gold and silver prices today maintained their upward momentum on hopes of a breakthrough in US stimulus talks. On MCX, February gold futures rose 0.35% to 49,770 per 10 gram, extending gains to the third day. Silver futures gained 1.2% to 66746 per kg. In the previous session, gold futures had risen 0.33% or 160 per 10 gram while silver had surged 1.5% or about 1,000 per kg.

                                     






As long as MCX gold prices hold the 49,170 level, further gains could be expected while a dip below that could squeeze down prices lower, Geojit Financial Services said in a note.

In global markets, gold prices were steady near a one-week high today, supported by hopes that US lawmakers will soon make progress towards a fiscal stimulus deal and a weak dollar. Spot gold was little changed at $1,864.36 per ounce. US Federal Reserve's pledge to keep rates low until an economic recovery is secure also helped to support gold rates.

The Fed in its final policy meeting of the year pledged to maintain its massive asset-purchase program until it sees “substantial further progress" in employment and inflation. Chairman Jerome Powell said that the case for fiscal stimulus is “very, very strong."

Gold’s rise has been aided by a weaker dollar. The US dollar index was down 0.32% at 90.073.

Among other precious metals, silver dropped 0.3% to $25.27 an ounce and platinum fell 0.3% to $1,031.50, while palladium gained 0.3% to $2,333.83.

Gold traders now will watch out for the Bank of England's policy decision, due later in the day. Gold is seen as a hedge against inflation and currency debasement.

Despite the recent pullback, gold prices remains significantly off the August highs of 56,200 as optimism about covid vaccines and hopes of a strong global economic recovery have taken some shine off the yellow metal.

"Similar to gold, silver also rebounded sharply from recent lows as US leaders increased efforts to finalize a stimulus deal. General optimism about Chinese economy and recovery in industrial activity has also lent support to silver. China’s industrial production and retail sales data showed continued improvement," Kotak Securities said in a note.

Gold prices in India are still up nearly 25% so far this year as prospects of further stimulus and coronavirus curbs in several parts of the world support the yellow metal.

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