The dollar index remained under pressure in late Asian trading on Wednesday, trading at around 90.30; Spot gold continued to rise, the current gold price close to $1855 / ounce level, up nearly $15 in the day.
Gold remained strong on a weaker dollar and hopes for more U.S. stimulus, rising as high as $1,853.87 an ounce in Asia late afternoon.
On January 19, local time, the US Senate Banking Committee held a hearing on the nomination of Janet Yellen as US Treasury secretary. In her testimony, Yellen urged lawmakers to “take big action” on the next coronavirus mitigation plan.
“With interest rates at historic lows, the wisest thing to do is to act aggressively,” Ms Yellen said. Mr. Biden announced a $1.9 trillion stimulus package last week.
Gold is considered a hedge against inflation and currency devaluation.
Jeffrey Sica, founder of Circle Squared Alternative Investments, said the possibility of more stimulus was very positive for gold.
According to Economies.com, gold is poised to make further gains after breaking through resistance at $1,850.80 an ounce, with the next target at $1,871.55.
$1,850.80 is the Fibonacci retracement of 23.6% of gold’s decline from the $1959.30 area.
Economies.com forecast on Wednesday that $1,820.00 and $1,860.00 would provide support and resistance to gold prices today.
The inauguration of the new US president will take place in Washington on January 20 at noon local time, and investors are closely watching the spotlight event, which could be the next catalyst for gold prices.
Analysts pointed out that if the inauguration of riots, the market risk aversion may increase, with a safe haven attribute of gold is expected to rise further.