Gold prices rise over 1% as focus turns to Joe Biden's administration

By K. Sathya Narayanan

(Reuters) - Gold prices rose more than 1% on Wednesday as U.S. Treasury secretary nominee Janet Yellen bolstered bets for another stimulus package under President Joe Biden.

Spot gold rose 1.5% to $1,867.06 per ounce by 11:58 a.m. EST (1658 GMT), having touched an over one-week high earlier. U.S. gold futures rose 1.5% to $1,867.20.

"You have a big day in the United States ... Traders are looking forward to Biden's speech coming up, (while) the comments from Yellen are keeping the metals higher," said Bob Haberkorn, senior market strategist at RJO Future.

Yellen on Tuesday said pandemic relief would take priority over tax increases.

Biden was sworn into office on Wednesday, with investors focused on his $1.9 trillion stimulus package proposal and the pace of COVID-19 vaccine distribution.

On the technical front, "it feels like gold wants to punch through and have a look at $1,900 in the coming days with the bullish flush of the changing of the guard", said Tai Wong, head of base and precious metals derivatives trading at BMO.

Gold is considered a hedge against inflation that can result from stimulus measures and against economic or political uncertainties.

Gold can still reach $2,000, probably by the middle of the second quarter when a good amount of people get inoculated and there's so much cash in the system with demand almost coming back to normal, said Howie Lee, an economist at OCBC Bank.

"People will start looking at inflation very closely then," Lee added.

Silver rose 2% to $25.68 an ounce, platinum climbed 2.2% to $1,107.05, while palladium rose 1.5% to $2,387.14.

 

(Reporting by K. Sathya Narayanan and Arpan Vanghese in Bengaluru; Editing by Paul Simao and Emelia Sithole-Matarise)