- Gold rises in Asia, confirming seller fatigue signaled by Friday’s Doji candle.
- The US Senate approves Biden’s stimulus program, putting a bid under the yellow metal.
Gold is trading near $1,713 per ounce at press time, up 0.88% on the day, having signaled indecision or seller exhaustion with a classic Doji candle on Friday.
The yellow metal, a proven store of value asset, looks to have picked up a bid in response to the U.S. Senate’s passage of President Joe Biden’s $1.9 trillion stimulus bill, which now heads back to the House for clearance. If approved, the bill will pave the way for $1,400 checks and jobless aid. Fiscal stimulus is inflationary.
The gains, however, could be restricted or reversed if the US bond yields continue to rise, diluting the yellow metal’s appeal as an inflation hedge.
The 10-year yield is currently seen at 1.58%, having reached a 12-month high of 1.62% on Friday on the back of upbeat Nonfarm Payrolls data.
According to some analysts, the stimulus passage, coupled with the strong US data and the blowout China exports data released over the weekend could lift yields.