Gold Down, Investors Expect Biden’s “Trillion” in Stimulus Plans By


© Reuters.

By Gina Lee – Gold fell Thursday morning in Asia as investors await details on President-elect Joe Biden‘s plans for new stimulus measures. They were down 0.85% to $ 1,839.20 at 12:16 AM ET (5:16 AM GMT). Yields on US Treasuries and both rebounded on Thursday. Benchmark 10-year Treasury yields rose to near 10-month highs, propelling the dollar against rival currencies. Biden has promised to deliver measures that could cost “trillions” of dollars and will release them later that day. “The fiscal stimulus will help fuel economic recovery, leading to a rise in real interest rates, as well as raising the Fed’s hopes of declining; on the other hand, it will also increase the outlook for inflation,” said the DailyFX strategist Margaret Yang. The yellow metal will fight through these price levels as the stimulus will have both positive and negative impacts, he added. Investors will also be looking for more clues about the prospects for US monetary policy when Federal Reserve Chairman Jerome Powell speaks at a virtual event later that day. Fed Governor Lael Brainard has already rejected suggestions that the Fed might cut its bond-buying program in 2021. The central bank said on Wednesday that the US economy was growing modestly, though it tempered optimism. as the number of COVID-19 cases continues to rise. . “I don’t think the Fed will take the reduction seriously in the short term, given the situation of the pandemic and the fragile economic recovery, however, any sign of reduction perhaps on a slightly longer horizon will trigger some nerves among the gold traders, “DailyFX’s Yang said. . Meanwhile, investors are monitoring the ongoing political unrest in the US before Biden and his administration take office on January 20. Hours earlier, the House of Representatives voted 232-197 to impeach incumbent President Donald Trump on the charge of inciting his support to the Capitol riot last week that left five dead and the building looted. The vote opens Trump’s second impeachment trial, after just over a year from the first, and makes him the first U.S. president to face two impeachments.

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