SINGAPORE: Gold prices edged lower in Asian trade on Tuesday as the dollar strengthened and concerns over the passage of a US stimulus package weighed on the metal’s appeal, while investors awaited a Federal Reserve policy meeting for cues on the monetary policy outlook.
Spot gold fell 0.2% to $1,852.30 per ounce by 0808 GMT. US gold futures eased 0.3% to $1,849.60.
“People are going into bonds and dollar, shying away from gold,” said Stephen Innes, chief global market strategist at financial services firm Axi.
“There’s a risk that the stimulus could get delayed until after (former US President Donald) Trump’s impeachment ... leaving gold on the mercy of the US central bank’s whim.”
US President Joe Biden’s $1.9 trillion pandemic relief proposal has been met with objections from Republicans, who have called the proposal too expensive and pushed for a smaller plan targeting vaccine distribution. “It seems very unlikely that all of $1.9 trillion will be passed via the Senate, they’re probably going to have to give away quite a bit of it in order to get something passed,” said DailyFX currency strategist Ilya Spivak.