Gold prices rose to a near one-week high on Tuesday as the dollar faltered and expectations firmed that a massive U.S. fiscal stimulus to revive the world’s largest economy will soon be passed.
Spot gold rose 0.6% to $1,841.06 per ounce by 0734 GMT, after hitting its highest level since Feb. 3 of $1,843.04 earlier in the session. U.S. gold futures gained 0.5% at $1,842.80.
“The main driver for gold is the confidence around U.S. President Joe Biden’s relief bill and the expectation of a further weakening of the U.S dollar which will come as a result of the aid,” said Michael Langford, director at corporate advisory AirGuide.
The dollar fell to an over one-week low against rivals, making gold cheaper for holders of other currencies.
Biden’s $1.9 trillion COVID-19 relief package is expected to pass through Congress before March 15 even without Republican support.
Gold is considered a hedge against inflation and currency debasement, likely from widespread stimulus.
A record surge in Bitcoin also boosted some sentiment, analysts said.
The non-farm payrolls data last week has bolstered bets the easy monetary policy is with us for a bit longer than expected, said DailyFX currency strategist Ilya Spivak.
However, higher inflation data along with vaccine adoption and easing lockdowns can nudge Treasury yields higher and weigh on gold, Spivak added.
Benchmark U.S. Treasury yields hit a near 11-month high on Monday. Higher yields increase the opportunity cost of holding non-yielding bullion.
Investors will now be focused on Federal Reserve Chairman Jerome Powell’s speech before a virtual Economic Club of New York event at 1900 GMT on Wednesday.
Among other precious metals, spot silver gained 0.5% at $27.40 an ounce, palladium climbed 0.7% to $2,346.86.
Platinum rose 1.9% to $1,178.80, after hitting $1,184.50, its highest since August 2016.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor
Read all the Latest News, Breaking News and Coronavirus News here
Comments
0 comment