Gold recovers as U.S. stimulus prospects offset firm dollar

Gold recovers as U.S. stimulus prospects offset firm dollar

Gold prices firmed on Monday, as prospects of a massive U.S. coronavirus relief aid outweighed a stronger dollar and lifted bullion's appeal as an inflation hedge.Spot gold rose 0.6% to $1,837.21 per ounce by 0559 GMT, after falling to their lowest since Dec. 2, 2020 at $1,809.90 earlier in the session.U.S. gold futures gained 0.3% to $1,835.70."The gold market remains relatively supported at these levels, as the current run of the U.S. dollar has more to do with safe haven, rather than a discernible pivot to a stronger dollar," said Stephen Innes, chief global market strategist at Axi."The U.S. stimulus (plan) is quite large, we're going to get around $1.9 trillion or $1.5 trillion, and either scenario is good for gold," Innes said.The U.S. dollar .DXY hit a four-week peak against rival currencies, making gold expensive for holders of other currencies. U.S. President-elect Joe Biden last week unveiled a $1.9 trillion stimulus package proposal to jump-start the economy and said he wants 100 million COVID-19 vaccine shots during his first 100 days in office. Gold is considered a hedge against inflation and currency debasement, likely from large stimulus.Although U.S. inflation expectations has risen in anticipation of more U.S. fiscal stimulus, gold has