PRECIOUS-Gold on back foot ahead of Biden's U.S. stimulus plan

© Reuters.

* Fed Chair Jerome Powell to attend virtual event at 1730
GMT
* Biden could launch a $2 trillion aid package- report
* Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3mvcUoa

(Updates prices)
By Diptendu Lahiri
Jan 14 (Reuters) - Gold prices edged lower on Thursday as
the dollar steadied and U.S. Treasury yields held near 10-month
highs, with markets waiting for President-elect Joe Biden to
reveal details of his stimulus plan.
Spot gold XAU= was 0.2% lower at $1,840.40 per ounce by
1232 GMT, while U.S. gold futures GCv1 slipped 0.7% to
$1,841.60.
"Gold is consolidating a bit. It is being pressured by
rallying Treasury yields and (the) dollar, that has strengthened
over a couple of sessions," Bank of China International analyst
Xiao Fu said.
Optimism over a report that Biden could launch a $2 trillion
aid package for coronavirus relief pushed benchmark 10-year
Treasury yields US10YT=RR towards a 10-month high.
US/ USD/ "A Democrat dominated Senate has led to the belief that
fiscal stimulus is now easily on the plate, which will not only
boost the economy but give the Fed a reason to increase interest
rates," Fu said.
Investors are focused on U.S. Federal Reserve Chair Jerome
Powell's participation in a virtual event, due at 1730 GMT, for
further clues on U.S. monetary policy.
The Fed said on Wednesday that the U.S. economy was gaining
pace modestly, although rising coronavirus cases kept a lid on
optimism. "Right now gold has a strong support at $1,820 and that is
because the expected stimulus package will increase the
inflation rate," said Ravindra Rao, vice president, commodities
at Kotak Securities.
"But most investors see the Fed dovish at least for the next
one year, which is expected to pull down real rates further,
keeping gold supported."
Non-yielding bullion is seen as a hedge against inflation
likely to result from large stimulus measures.
In other metals, silver XAG= gained 0.4% to $25.23 an
ounce. Platinum XPT= climbed 1.4% to $1,109.42 per ounce,
while palladium XPD= was steady at $2,385.36.