Gold rises on inflation bets ahead of Biden unveiling stimulus

Gold prices rose on Thursday ahead of US President-elect Joe Biden's coronavirus stimulus proposal, while data showing US consumer prices rose solidly in December bolstered bets of higher inflation.

FUNDAMENTALS

Spot gold rose 0.3% to $1,848.07 per ounce by 0054 GMT, while US gold futures eased 0.4% to $1,847.70.

Biden will press Congress on Thursday to deliver immediate pandemic "rescue" efforts before turning to broader "recovery" measures like healthcare and infrastructure, the incoming administration's top economic adviser said on Wednesday.

Biden last week estimated his economic relief plan would cost "trillions" of dollars.

US consumer prices increased solidly in December and inflation could temporarily accelerate this year as the government provides more money to stimulate the economy.

Gold is considered a hedge against inflation.

US economic activity increased modestly in recent weeks and a growing number of the Federal Reserve's districts saw a drop in employment as a surge in coronavirus cases led to more shutdowns of businesses, the US central bank said on Wednesday.

The US House of Representatives passed a single article of impeachment accusing President Donald Trump of "incitement of insurrection", making him the first president in US history to be impeached twice.

Exchange traded funds (ETFs) storing gold for investors shrank for a second month in December, but nevertheless grew more than ever before in 2020 thanks to massive stockpiling earlier in the coronavirus outbreak.

Silver rose 0.8% to $25.34 an ounce. Platinum climbed 0.4% to $1,098.77, while palladium eased 0.4% to $2,375.45.