Gold on back foot ahead of Biden's US stimulus plan

• Fed Chair Jerome Powell to attend virtual event at 1730 GMT.
• Biden could launch a $2 trillion aid package- report.

Gold prices edged lower on Thursday as the dollar steadied and US Treasury yields held near 10-month highs, with markets waiting for President-elect Joe Biden to reveal details of his stimulus plan.

Spot gold fell 0.3% to $1,838.44 per ounce by 1052 GMT, while US gold futures slipped 0.8% to $1,839.80.

"Gold is consolidating a bit. It is being pressured by rallying Treasury yields and (the) dollar, that has strengthened over a couple of sessions," Bank of China International analyst Xiao Fu said.

Optimism over a report that Biden could launch a $2 trillion aid package for coronavirus relief pushed benchmark 10-year Treasury yields towards a 10-month high.

"A Democrat dominated Senate has led to the belief that fiscal stimulus is now easily on the plate, which will not only boost the economy but give the Fed a reason to increase interest rates," Fu said.

Investors are focused on US Federal Reserve Chair Jerome Powell's participation in a virtual event, due at 1730 GMT, for further clues on US monetary policy.

The Fed said on Wednesday that the US economy was gaining pace modestly, although rising coronavirus cases kept a lid on optimism.

"Right now gold has a strong support at $1,820 and that is because the expected stimulus package will increase the inflation rate," said Ravindra Rao, vice president, commodities at Kotak Securities.

"But most investors see the Fed dovish at least for the next one year, which is expected to pull down real rates further, keeping gold supported."

Non-yielding bullion is seen as a hedge against inflation likely to result from large stimulus measures.

In other metals, silver was steady at $25.13 an ounce. Platinum climbed 0.9% to $1,104.07 per ounce, while palladium rose 0.3% to $2,390.87.