Spot gold rose 0.57 per cent to $1841.13 an ounce, while the dollar index fell 0.28 per cent to 90.695, breaking a six-day low of 90.687.
Michael Langford, director of AirGuide, a corporate consultancy, said: "the main drivers of gold prices are confidence in President Biden's stimulus bill and expectations that the dollar will weaken further as a result of the stimulus package."
President Joe Biden's $1.9 trillion anti-epidemic relief plan is expected to be passed by Congress by March 15, even without Republican support. Investors are focusing on Federal Reserve Chairman Colin Powell's online speech at the New York Economic Club at 3:00 on Thursday.
Ilya Spivak, foreign exchange strategist at DailyFX, said the weak non-farm payrolls data released last week boosted bets that loose monetary policy would last longer than the market expected. However, the start of vaccination efforts and the relaxation of restrictions could lead to a rise in U. S. bond yields, putting pressure on gold prices. (note: the yield on 10-year Treasuries hit a record high of 1.198% since March last year.)
Economists at Goldman Sachs on Monday raised their second-quarter (GDP) growth forecast to 11 per cent from 10 per cent and said the additional fiscal measures could reach $1.5 trillion, up from the previous estimate of $1.1 trillion.
Economists at Goldman Sachs also said they had advanced the timing of the Fed's first rate hike from the second half of 2024 to the first half of 2024, as the unemployment rate fell less than expected in January and there were signs of a "rise" in inflation as a result of higher economic forecasts.
President Joe Biden's proposal to raise the minimum hourly wage to $15 by June 2025 will reduce 1.4 million jobs that year and increase the US budget deficit by $54 billion over the 10-year period from 2021 to 2031, the Congressional Budget Office ((CBO)) said on Monday.
Raising the minimum wage will also lift 900000 Americans out of poverty by 2025, CBO said. The pay increase bill will increase the net cumulative salary of the affected population by $333 billion between 2021 and 2031. But CBO also pointed out in the evaluation report that this represents an increase in labor costs for enterprises.
Three people familiar with the matter pointed out that the United States is evaluating various ideas on how to revive the Iran nuclear deal, including small actions taken by both sides in exchange for time if the agreement is not fully implemented.
