Gold prices gain as dollar falls

Gulf Today Report 

Gold prices rose on Monday as the dollar declined and investors remain hopeful for a massive stimulus to be passed soon.

Spot gold rose 0.1% to $1,854.95 per ounce, it has regained from the 0.9% fall in the previous session. US gold futures eased 0.1% to $1,854.30.

Republicans showed concerns about the $1.9 trillion pandemic relief proposal being too expensive, President Joe Biden's administration tried to head it off on a Sunday call.

Lachlan Shaw, National Australia Bank’s head of commodity research said, "we’re seeing bigger question marks over the passage of Biden's stimulus package, Senate Republicans are starting to stand a bit more objectionable with particular parts of the package." 

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The dollar declined by 0.1% against other currencies, making gold cheaper for holders of those currencies.

Gold serves as a shield against inflation that could occur due to stimulus.

Investors are looking towards the US Federal Reserve’s policy meeting coming up in a few days.

"The Fed is likely to take the conservative course and wait for additional data and assume fragility, given the short-run effects of tackling COVID in the US more aggressively could weaken sales and domestic economic activity," said Nicholas Frappell, global general manager at ABC Bullion.

"The longer-term outlook and technical support remain bullish so above $1,840, look for moves back to $1,870-$1,880."