Gold Gains More Than 1% As Focus Turns To Biden Administration

Gold rose more than 1% on Wednesday ahead of U.S. President-elect Joe Biden’s inauguration, extending gains after his nominee to head the Treasury Department, Janet Yellen, bolstered bets for another pandemic-related stimulus package.

Spot gold rose 1.3% to $1,863.48 per ounce by 10:16 a.m. EST (1516 GMT), having risen to an over one-week high earlier. U.S. gold futures rose 1.2% to $1,862.90.

“You have a big day in the United States … Traders are looking forward to Biden’s speech coming up, (while) the comments from Yellen are keeping the metals higher,” said Bob Haberkorn, senior market strategist at RJO Future.

Yellen on Tuesday said pandemic relief would take priority over tax increases, adding that the benefits of a relief package outweighed the expenses of a higher debt burden.

Gold is considered a hedge against inflation, which can result from widespread stimulus measures.

Biden will be sworn in as the 46th president of the United States on Wednesday, with investors focused on his $1.9 trillion stimulus package proposal and the pace of COVID-19 vaccine distribution.

“People are more positioning for some kind of disruption in the U.S. around this political regime change,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

Bullion is also seen as a safe haven against any economic or political uncertainties.

Gold at $2,000 is still achievable, probably by the middle of the second quarter when a good amount of people get inoculated and there’s so much cash in the system with demand almost coming back to normal, said Howie Lee, an economist at OCBC Bank.

“People will start looking at inflation very closely then,” Lee added.

Gold’s jump came alongside a rally in Wall Street ahead of Biden’s inauguration. [.N]

Silver rose 1.8% to $25.64 an ounce, platinum was up 2.1% at $1,105.59, while palladium rose 1% to $2,375.03.

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