Gold prices rose on Wednesday as investors assessed the likelihood of further fiscal stimulus in the United States.

Spot gold rose 0.9 percent to $1,831.40 per ounce, while U.S. gold futures were up 0.8 percent at $1,834.05.

Federal Reserve Chair Jerome Powell and U.S. Treasury Secretary Steven Mnuchin both backed more fiscal stimulus to bridge the economy through the next few months of the pandemic.

In Senate testimony on Tuesday, Powell suggested that more fiscal stimulus would be needed in addition to the central bank’s monetary support.

“Some fiscal support now would really help move the economy along” and guard against downside risks, particularly to small businesses, Powell told the Senate Banking Committee Tuesday during a joint appearance with the Treasury chief.

Mnuchin also said he supported “targeted, quick relief.”

U.S. Treasury yields slipped after a $908 billion bipartisan economic stimulus plan was rejected by Senate Majority Leader Mitch McConnell.

Meanwhile, the New York Times reported that U.S. President-elect Joe Biden will leave the phase-one trade deal with China in place while he conducts a full review of the policy toward China in consultation with traditional allies in Asia and Europe.

The material has been provided by InstaForex Company – www.instaforex.com

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