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A rebound in the U.S. currency from the lowest level in almost three years, coupled with a surge in 10-year yields, has been weighing on non-interest bearing bullion. President-elect Joe Biden is set to release proposals for a multitrillion-dollar stimulus package on Thursday, which could help to pave the way for a rise in inflation, against which gold is seen as a hedge.
The precious metal has lost ground so far in 2021 after posting its biggest annual gain in a decade on the back of the devastating effects of the pandemic, vast stimulus, and rising haven demand. Now, Federal Reserve officials are saying that more fiscal support and the mass distribution of vaccines could lead to a strong U.S. economic recovery in the second half, setting the stage for a discussion about tapering of bond buying before the year-end.
Spot gold was little-changed at $1,843.85 an ounce at 9:20 a.m. in Singapore. It sank 5.4% in the past four days. Silver climbed 0.7%, platinum advanced 2.3% and palladium added 0.7%. The Bloomberg Dollar Spot Index was flat after gaining 0.5% on Monday.
Meanwhile in U.S. politics, House Democrats Monday introduced a resolution to impeach Donald Trump for a second time, setting up a vote this week after the riot at the Capitol. The president and his deputy, Mike Pence, have agreed to work together for the remainder of their term, according to an administration official, signaling that Trump won’t resign or face removal by his cabinet.
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