Gold prices inched up on Tuesday, as a weaker dollar and hopes of a massive U.S. stimulus package to support the virus-stricken economy boosted the precious metal’s appeal.
Spot gold rose 0.1% to $1,832.21 per ounce by 0042 GMT. U.S. gold futures were steady at $1,834.60.
The dollar hit a near one-week low in the previous session.
Investors remained focused on a $1.9 trillion U.S. COVID-19 relief package as lawmakers approved a budget outline that will allow them to muscle President Joe Biden’s plan through in the coming weeks without Republican support.
U.S. Treasury Secretary Janet Yellen said on Sunday the $1.9 trillion stimulus plan can help the country get back to full employment by next year.
Gold is considered a hedge against inflation and currency debasement, likely from widespread stimulus.
Further boosting sentiment, Bitcoin soared to a record high after billionaire Elon Musk’s electric vehicle company Tesla Inc on Monday revealed it had bought $1.5 billion of the cryptocurrency and would soon accept it as a form of payment for cars.
Limiting gold’s advance, however, benchmark U.S. Treasury yields neared 11-month highs on Monday as U.S. fiscal stimulus was seen boosting economic growth and spurring inflation.
Higher yields increase the opportunity cost of holding non-yielding bullion.
The United States reported a 25% drop in new cases of COVID-19 last week, the biggest fall since the pandemic started, while Britain recorded the smallest number of new COVID-19 cases for two months on Monday.
Holdings in the world’s largest gold-backed exchange-traded fund SPDR Gold Trust fell 0.35% to 1,152.43 tonnes on Monday.
* Spot silver gained 0.3% to $27.34 an ounce, platinum rose 0.7% to $1,164.69 and palladium was steady at $2,330.99.