Gold futures edged up early Wednesday, with the precious metal attempting to avoid a fourth straight decline, which would represent its longest string of losses in about eight months.
A series of U.S. economic reports, pulled forward due to the holiday-shortened week, saw bullion enjoy a modest pop higher as yields for government bond yields edged up and the U.S. dollar was seeing subdued action, as measured by the ICE U.S. Dollar Index off less than 0.1%.
Consumer spending, the backbone of the U.S. economy, declined in November as COVID-19 cases picked up across the country and damped activity.
New applications for U.S. unemployment benefits fell to a three-week low of 803,000 right before Christmas, but the relatively high level still reflected a fresh wave of layoffs tied to the record COVID-19 outbreak.
Bullion enthusiasts see the precious asset as a potential hedge heading into 2021, with fears of aggressive government spending, ultralow bond yields, and lofty stock valuations buttressing the commodity.
“Overall, we remain positive on the yellow metal as long as real yields continue trading in negative territory, which is likely to be the scenario in the year ahead,” wrote Hussein Sayed, chief market strategist at FXTM, in a note.
February gold traded $4.10, or 0.2%, higher at $1,874.60 an ounce, after a 0.6% slide on Tuesday. If the metal closes lower on Wednesday it would represent its longest bout of weakness since the period ended April 20.
Silver for March delivery, meanwhile, rose 23 cents, or 0.9%, at $25.77 an ounce, following its 3.2% decline in the previous session.