Gold advanced after its first weekly decline in four as U.S. Treasury Secretary Janet Yellen said President Joe Biden’s economic plan won’t stoke inflationary pressures.
Biden’s economic plan is unlikely to create inflation pressure in the U.S. because the boost to demand will be spread over a decade, Yellen, the former Federal Reserve chair, said Sunday on NBC’s “Meet the Press.”
The precious metal, which is down 6% this year, has clawed back some gains over the past month as central banks, including the U.S. Fed last week, stuck to dovish monetary policies. While the Fed said signs of inflation were transitory, assuaging fears of an early rate hike, strong U.S. economic data continues to pressure havens.
Gold may continue to gain support from the Fed’s dovish approach and a weaker dollar, according to Angel Broking Ltd.’s analysts Prathamesh Mallya and Yash Sawant.
Gold advanced 0.7% to $1,780.87 an ounce by 12:53 p.m. in London after dropping 0.5% last week. Palladium and silver gained, while platinum was little changed. The Bloomberg Dollar Spot Index fell 0.1% after climbing 0.7% Friday.
Bullion could gain further impetus amid expectations that outflows from gold-backed exchange traded funds will start to reverse, according to Carsten Fritsch, an analyst at Commerzbank AG.
“We expect ETFs to begin registering inflows again in the second half of the year at the latest, and that this will help the gold price climb by year’s end to $2,000,” Fritsch said in a note.
Copper futures on Comex in New York rose 0.5% to $4.491 a pound.
Japan, China and the U.K. markets are closed for holidays on Monday.