Gold rose by more than 1% on Tuesday, driven by market expectations of additional economic support as COVID-19 cases climbed ahead of the U.S. Federal Reserve’s policy meeting.
Spot gold was up 1.1% at $1,846.61 per ounce, while U.S. gold futures rose 1% to $1,850.10.
“It is pretty dire in Europe, Asia, South Korea, Japan and the U.S., driving some stimulus expectations and giving (gold) a bit of push,” Saxo Bank analyst Ole Hansen said.
Investors are awaiting policy meetings of the U.S. Fed starting on Tuesday and the Bank of England on Thursday.
“It is pre-FOMC positioning but we’re seeing liquidity start to dry up and that means any changes in the flow of news and data can have an oversized impact as the market winds down ahead of Christmas and New Year.”