PRECIOUS-Gold hits 2-week high as U.S. stimulus hopes pressure dollar

PRECIOUS-Gold hits 2-week high as U.S. stimulus hopes pressure dollar

Reuters  | Jan 21, 2021 15:30

PRECIOUS-Gold hits 2-week high as U.S. stimulus hopes pressure dollar

* Yields will dictate gold's movement - strategist
* ECB monetary policy decision due at 1245 GMT
* Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3mvcUoa

(Adds comment, updates prices)
By Sumita Layek
Jan 21 (Reuters) - Gold rose on Thursday to its highest in
nearly two weeks as the U.S. dollar eased on hopes of further
stimulus under President Joe Biden's administration, although
some profit booking checked the metal's gains.
Spot gold XAU= was up 0.1% at $1,873.36 per ounce by 0653
GMT, after hitting its highest since Jan. 8 at $1,874.50 earlier
in the session. Bullion had gained 1.7% on Wednesday.
U.S. gold futures GCv1 climbed 0.3% to $1,871.70.
"Gold has some more upside in the slightly longer horizon,
given that global central banks are likely to stay dovish for an
extended period of time," said DailyFX strategist Margaret Yang.
The Bank of Japan kept its monetary policy steady on
Thursday, and investors are now waiting for the European Central
Bank monetary policy decision due at 1245
GMT. Market focus was also on Biden's $1.9 trillion stimulus plan
as he gears up to jump-start his response to the COVID-19
pandemic, which has claimed more than 400,000 lives and upended
the world's largest economy. "The virus mutation is a big wild card and if vaccine
development, manufacturing and rollout can't catch up to the
pace of the mutation, the pandemic could last much longer than
we'd previously thought," Yang said.
Bullion is considered a hedge against inflation that can
result from stimulus measures.
The dollar .DXY dipped 0.2% against rival currencies and
the benchmark 10-year U.S. Treasury yields held below the
10-month peak scaled last week. USD/ US/
"The backdrop and all the tailwinds from previous rallies
remain constant, but I suspect Treasury yields will dictate the
direction of travel for the yellow metal," Stephen Innes, chief
global market strategist at Axi, said in a note.
Higher yields increase the opportunity cost of holding
non-yielding bullion.
Silver XAG= rose 0.3% to $25.87 an ounce. Platinum XPT=
eased 0.1% to $1,108.28, while palladium XPD= gained 0.4% to
$2,381.15.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Biden looks to galvanize COVID-19 fight, vaccinations as he
takes office announces return to global climate accord, new curbs on
U.S. oil industry ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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