NEW YORK: Gold prices edged lower on Tuesday on concerns over a fresh US coronavirus aid package, while a slightly weaker dollar and subdued treasury yields limited losses and investors kept a close eye on the Federal Reserve’s policy meeting.
Spot gold was down 0.1% to $1,852.31 per ounce at 11:00 a.m. EST (1600 GMT). US gold futures were down 0.2% at $1,850.60.
“There is no clarity on where fiscal spending is going, there is no full clarity of how the central bank is going to react ... these uncertainties are serving as a cap on gold,” said Bart Melek, head of commodity strategies at TD Securities.
However, the dollar slipped from a near one-week high, raising gold’s appeal for other currency holders.
“The US dollar came off a little bit and that’s typically a supportive factor.”
US President Joe Biden’s $1.9 trillion pandemic relief proposal faces hurdles as Republicans voiced concerns over the cost and lobbied for a smaller plan targeting vaccine distribution.
“If they do reach a deal it might be a watered down version to get it through Congress, so that’s also weighing on (the gold) market,” said Saxo Bank analyst Ole Hansen.
Investors now await the US central bank’s policy statement due at the end of a two-day policy meeting on Wednesday.
Meanwhile, US 10-year Treasury yields hit a near three-week low. Lower yields reduce the opportunity cost of holding non-yielding bullion.
On the physical front, China’s net gold imports via Hong Kong in December rose for a second straight month, although imports for the year plunged by 85% as the pandemic took its toll on the country’s demand for the metal.
Silver rose 0.7% to $25.48 an ounce, platinum lost 0.6% to $1,092.15, and palladium fell 0.7% to $2,317.83.
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