Gold firms on weaker dollar; Biden stimulus plan in focus

Gold firms on weaker dollar; Biden stimulus plan in focus

Gold prices edged higher on Monday as the dollar remained under pressure, with investors eyeing a big stimulus package under U.S. President Joe Biden's administration.Spot gold rose 0.2% to $1,855.40 an ounce by 0958 GMT in choppy trade. U.S. gold futures were down 0.1% at $1,854.80."It's clear that the economy is quite fragile, so there is a lot of support for fiscal and monetary stimulus, and as such the dollar remains relatively weak, which may underpin gold," said independent analyst Ross Norman."The market is looking for a catalyst - we may as well get it this week - we have the FOMC meeting on Wednesday and there's some expectation for interest rates to remain on hold."The U.S. Federal Reserve's two-day policy meeting starts on Tuesday.Biden's administration has emphasised the urgency for a $1.9 trillion pandemic relief proposal while trying to calm Republican concerns about the package being too expensive. "Optimism around a $1.9 trillion fiscal stimulus may fuel expectations of the Fed tapering some of its ongoing support. Any taper talk could steepen the U.S. Treasury yield curve, which may provide support to the dollar, ultimately pressuring gold prices," said Lukman Otunuga, senior research analyst at FXTM."However, if the Fed expresses