Gold prices are edging lower Monday morning as investors look to pick up riskier assets such as equities following U.S. President Donald Trump signing a coronavirus relief package and government spending package.
Gold prices initially reacted positively to news about signing of the relief package by Trump. However, prices came off higher levels as stock markets in Asia and Europe gained in strength, buoyed by U.S. stimulus news and reports about a post-Brexit trade deal between the European Union and the U.K.
A slightly weaker dollar limits gold’s weakness. The dollar index is down 0.1% at 90.22, after having slid to 89.98 earlier.
Gold futures for February fell to $1,881.10 an ounce before edging up slightly to $1,883.70 an ounce, gaining $0.50.
Despite its retreat from higher levels, gold manages to find support amid expectations the massive stimulus package will push up inflation.
On Sunday, U.S. President Donald Trump signed legislation for $900 billion in coronavirus economic aid and $1.4 trillion in government spending, providing support for millions of Americans and averting a government shutdown. He had earlier threatened to block the package.
“I am signing this bill to restore unemployment benefits, stop evictions, provide rental assistance, add money for PPP, return our airline workers back to work, add substantially more money for vaccine distribution, and much more,” Trump said in a statement.
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