Bloomberg
(Bloomberg) -- Gold rose from the lowest level in more than six weeks amid some caution in markets as investors assessed the outlook for the dollar and the timeline for the U.S. stimulus package.U.S. and European equity futures dipped and Asian stocks were mixed Monday. Global shares slipped last week after optimism about the $1.9 trillion U.S. aid package, and the so-called reflation trade, faltered into a long weekend, with U.S. equity and bond markets shut Monday for the Martin Luther King Jr. holiday. Bullion bounced back “amid broad risk-off sentiment,” said Margaret Yang, a strategist at DailyFX.“Market sentiment is tilted toward the cautious side after U.S. equities pulled back from their recent highs despite robust corporate earnings,” said Yang. “As U.S. markets are closed for a public holiday, thinner liquidity conditions could exacerbate price volatility.”Meanwhile, former Federal Reserve Chair Janet Yellen is expected to affirm the U.S.’s commitment to market-determined exchange rates when she testifies on Capitol Hill Tuesday, and she will make clear the U.S. doesn’t seek a weaker dollar for competitive advantage, according to a report from the Wall Street Journal, citing people familiar with the preparation. A gauge of the greenback has climbed in the past two weeks.Yellen’s confirmation hearing as Treasury Secretary is scheduled for Jan. 19 in front of the Senate Finance Committee, the day before President-elect Joe Biden is sworn into office.Bullion has dropped about 3% this year as U.S. Treasury yields and the dollar advanced. Still, the metal is staying above $1,800 an ounce and is expected to receive support from massive stimulus packages from central banks and governments. Biden is pushing for quick congressional action on his economic relief plan, but he risks slowing it down with a federal minimum-wage increase that Republicans and business groups have long fought.“A stronger U.S. dollar is proving to be a headwind for precious metals prices despite the massive trillion dollar stimulus proposals to alleviate the ill effects of Covid-19,” said Avtar Sandu, a senior manager for commodities at Phillip Futures Pte.Spot gold climbed 0.6% to $1,839.01 an ounce by 6:59 a.m. in London after earlier falling as much as 1.3% to $1,804.71, the lowest level since Dec. 1. Silver and platinum rose, while palladium was steady.On the coronavirus front, global cases topped 95 million, while the U.S. death toll from Covid-19 neared 400,000. Anthony Fauci, America’s top infectious disease expert, said that Biden’s promise of delivering 100 million vaccine doses in 100 days is “absolutely a doable thing.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
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