Bengaluru — Gold prices gained on Monday as the dollar eased and hopes that a huge economic stimulus in the world’s largest economy would be passed remained intact.
Spot gold rose 0.1% to $1,854.95 per ounce by 5.29am, recovering from a 0.9% decline in the previous session. US gold futures eased 0.1% to $1,854.30.
President Joe Biden’s administration tried to head off Republican concerns that his $1.9-trillion pandemic relief proposal was too expensive on a Sunday call.
“We’re seeing bigger question marks over the passage of Biden’s stimulus package, Senate Republicans are starting to stand a bit more objectionable with particular parts of the package,” said Lachlan Shaw, National Australia Bank’s head of commodity research.
“So it does raise the question about the speed and the timing of the package. [Though,] some of the issues of the vaccine delays in the US are perhaps tilting the balance in odds of favour of that stimulus,” Shaw added.
The dollar was down 0.1% against rival currencies, making gold cheaper for holders of other units. Gold is considered a hedge against inflation, likely from widespread stimulus.
Also supporting the precious metal, global coronavirus cases rose to more than 98-million as countries struggled to increase the pace of vaccinations. Investors now await the US Federal Reserve’s policy meeting due on January 26-27.
“The Fed is likely to take the conservative course and wait for additional data and assume fragility, given the short-run effects of tackling Covid in the US more aggressively could weaken sales and domestic economic activity,” said Nicholas Frappell, global general manager at ABC Bullion. “The longer term outlook and technical support remain bullish, so above $1,840, look for moves back to $1,870-$1,880.”
Silver gained 0.7% to $25.58 an ounce, platinum rose 0.1% to $1,099.61, and palladium added 0.1% to $2,354.47.