“Gold is drawing strength from the renewed optimism over US stimulus plans and rising inflation expectations,” Lukman Otunuga, senior research analyst at FXTM, told Reuters.
“The metal continues to be pulled and tugged by conflicting forces, and while gold bulls remain protected by the ‘reflation trade’, stimulus hopes continue to lift the market mood and overall risk sentiment,” Otunuga added.
Gold’s gains came despite a slightly higher dollar, which makes bullion more expensive for buyers with other currencies. Meanwhile, global equities hit a record high on Monday on hopes that the $1.9 trillion aid package will be passed by US lawmakers as soon as this month.
Limiting gold’s upside, benchmark 10-year Treasury yields hovered near their highest since March last year, increasing the opportunity cost of holding non-yielding bullion.
Gold’s sister metal silver, which has been the subject of a Reddit-fueled retail investment frenzy for over a week, also rose 2.0% to $27.44 an ounce on the renewed stimulus hopes.
(With files from Reuters)
