 "Gold")
By Sumita Layek
(Reuters) - Gold rose on Friday as prospects of a substantial U.S. pandemic relief package boosted the metal's appeal as an inflation hedge, while the Federal Reserve's dovish stance on monetary policy also supported prices.
Spot gold rose 0.3% to $1,851.14 per ounce by 0251 GMT, while U.S. gold futures were flat at $1,851.20.
"The stimulus is going to be bullish for asset markets and with the Fed chair quashing any prospects of raising interest rates or dialling down bond buying anytime soon, has given some support to gold," said Jeffrey Halley, a senior market analyst at OANDA.
U.S. President-elect Joe Biden unveiled a $1.9 trillion stimulus package proposal on Thursday designed to jump-start the economy and accelerate the distribution of coronavirus vaccines.
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Powell on Thursday said there is no reason to alter the central bank's highly accommodative stance with the U.S. economy still far from its inflation and employment goals.
Easy central bank monetary policy adds pressure on government bond yields and benefits gold, which is also considered a hedge against inflation.
But the price action in gold has consolidated and it is not showing any signs of trying to break out to the upside, Halley said, adding U.S. yields will move up again and put gold under pressure.
Benchmark 10-year Treasury yields eased after touching a 10-month high earlier in the week, while Asian shares rose.
"Gold's upside looks constrained amid rising yield and buoyant risky assets. However, a weaker U.S. dollar, stimulus expectations and depressed real interest rates should remain supportive," ANZ analysts said in a note.
Silver rose 0.3% to $25.59 an ounce. Platinum eased 0.8% to $1,108.92, but was up over 4% so far this week, while palladium held steady at $2,408.06.
(Reporting by Sumita Layek in Bengaluru; Editing by Ramakrishnan M.)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
