Gold prices react to Biden´s stimulus announcement
Fear of inflation lets gold prices move up.

Gold prices fell Monday on concerns that a massive stimulus package might not pass smoothly in the United States, despite a weaker dollar limiting gold's losses. Spot gold fell 0.1% to $ 1,850.91 an ounce at 0822 GMT after falling 0.9% in the previous session. U.S. Gold futures fell 0.2% to $ 1,851.80. President Joe Biden's administration attempted to allay Republicans' concerns in a phone call on Sunday that his $ 1.9 trillion pandemic aid proposal was too expensive. "We're seeing bigger question marks about the Biden stimulus package being passed, Senate Republicans starting to reject certain parts of the package," said Lachlan Shaw, director of natural resources research at the National Australia Bank. "So the question arises as to the speed and timing of the implementation of the package. (Although,) some of the problems with vaccine delays in the US may be tipping the balance in favor of this stimulus," added Shaw. Gold is seen as a hedge against inflation, which is likely to be triggered by a broad-based stimulus. The number of coronavirus cases in the US passed the 25 million mark on Sunday as the pace of vaccinations remained sluggish while the European Union vaccination campaign was hampered by AstraZeneca Plc's production problems. The dollar lost 0.1% against competing currencies, making gold attractive to holders of other units. Investors are now waiting for the US Federal Reserve meeting on January 26-27. "The Fed is likely to take the conservative course, wait for additional data and see some weakness as the short-term effects of more aggressive crackdown on COVID-19 could weaken domestic economic activity," said Nicholas Frappell, global general manager at ABC Bullion. "The longer-term outlook and technical support remain bullish," he added, so gold could move back to $ 1,870- $ 1,880 above $ 1,840. Silver rose 0.3% to $ 25.47 an ounce, platinum rose 0.1% to $ 1,099.41, and palladium lost 0.1% to $ 2,351.84.





