Bengaluru — Gold prices edged a tick higher on Thursday, as expectations of a $2 trillion-plus stimulus plan in the US raised concerns of inflation, while reports of a new vaccine-resistant virus strain also supported bullion’s safe-haven appeal.
Spot gold was up 0.2% at $1,710.28/oz by 1.56am GM, though it was set for its second straight weekly fall. US gold futures fell 0.3% to $1,709.80/oz.
US President Joe Biden on Wednesday called for a sweeping use of government power to reshape the world’s largest economy and counter China’s rise in a $2-trillion-plus proposal that was met with swift Republican resistance.
Stimulus measures increase the chances of higher inflation and gold is often considered as a hedge against it.
The World Trade Organization slightly raised its growth forecast for global goods trade in 2021, but said the outlook was clouded by risks from the rollout of coronavirus vaccines and the possible emergence of vaccine-resistant strains.
However, taking a little shine off the metal, Asian stocks were set to edge higher early on Thursday after big tech rallied on Wall Street and as Biden announced a multitrillion-dollar infrastructure investment plan.
US government bond yields rose on Wednesday after the US president unveiled the infrastructure endeavour. The US dollar will remain strong for at least another month, according to a Reuters poll of foreign exchange strategists, who still forecast that the currency will weaken in the longer term.
Japanese big manufacturers’ sentiment improved to pre-pandemic levels in the first quarter and companies stepped up capital spending plans.
Silver dipped 0.1% to $24.36, while platinum was down 0.3% at $1,184.14 and palladium slipped 0.1% to $2,616.55.