Gold edged higher on Friday after U.S. President-elect Joe Biden unveiled a $1.9 trillion stimulus package proposal and the Federal Reserve issued a dovish outlook at least for the next one year.
Spot gold rose 0.4 percent to $1,854.43 per ounce, while U.S. gold futures were up 0.1 percent at $1,853.90.
Risk sentiment weakened somewhat as the announcement of a highly anticipated stimulus plan from Biden was offset by fresh U.S.-China tensions and a rise in Covid-19 infections in Europe and China.
Biden unveiled a $1.9 trillion stimulus package proposal on Thursday designed to jump-start the economy and accelerate the distribution of coronavirus vaccines.
Also on Thursday, Fed chairman Powell downplayed the risk of higher inflation and talk of the central bank tapering its bond purchases in the near term.
With the U.S. economy still far from its inflation and employment goals, it is too early for the Federal Reserve to discuss changing its monthly bond purchases, he said.
On the Covid-19 front, concerns persist over climbing coronavirus cases and tougher lockdown measures to curb the spread.
German Chancellor Angela Merkel told a meeting of top officials from her party on Thursday that she wants “very fast action” to counter the spread of Covid-19 mutations.
“The virus can only be stopped with additional efforts,” the participants quoted her as saying after the country saw a record number of deaths from the virus.
France strengthened border controls and extended a curfew to the entire country on Thursday to combat the virus as the situation remains worrying.
China has put millions of people in lockdown in response to new outbreaks of Covid-19 in the north and northeast.
The material has been provided by InstaForex Company – www.instaforex.com