SINGAPORE: Gold rose in Asian trade on Monday, supported by a softer dollar and bets for further US monetary stimulus to revive the pandemic-hit economy outweighing pressure from optimism over a possible Covid-19 vaccine rollout next month. Spot gold rose 0.2% to $1,874.30 per ounce by 0729 GMT and US gold futures fell 0.1% to $1,870.90.
US Treasury Secretary Steven Mnuchin on Friday reassured markets that the Fed and Treasury had many tools left to support the economy, after deciding to de-fund several Federal Reserve lending programs by the end of the year.
"Ironically, the failure to deliver a fiscal package is supportive for gold," said Michael McCarthy, chief strategist at CMC Markets, noting there might be more reliance on Fed support likely in the form of liquidity and lower interest rates as a result.
Non-yielding gold is often seen as a hedge against inflation that is likely to result from stimulus measures. Gold's advance also came despite news that US healthcare workers could start getting Covid-19 inoculation shots within a day or two of regulatory consent next month, helping to push Asian equities to record highs.
"The vaccine is not going to change the fundamentals of gold in near term ... It is going to take a lot of time for vaccine to penetrate into the global market," said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.
On the technical front, gold may retest support at $1,855 per ounce, a break below which could cause a fall to $1,841, according to Reuters technical analyst Wang Tao.
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