By Gina Lee
Investing.com – Gold was down on Thursday morning in Asia, with investors awaiting details on U.S. President-elect Joe Biden’s plans for further stimulus measures.
Gold futures were down 0.85% at $1,839.20 by 12:16 M ET (5:16 AM GMT). U.S. Treasury yields and the dollar both saw rebounds on Thursday. Benchmark ten-year Treasury yields rose to hover near ten-month highs, boosting the dollar against rival currencies.
Biden has promised to deliver measures that could cost “trillions” of dollars and will unveil them later in the day.
"Fiscal stimulus will help boost economic recovery, leading to rising real interest rates as well as bring up Fed's tapering hopes; on the flip side, it will also increase the inflation outlook," DailyFX strategist Margaret Yang said.
The yellow metal will be struggling around these price levels as the stimulus will have both positive and negative impacts, she added.
Investors will also look for further clues on the U.S. monetary policy outlook when Federal Reserve Chairman Jerome Powell speaks at a virtual event later in the day. Fed Governor Lael Brainard has already pushed back against suggestions the Fed could taper its bond-buying program in 2021.
The central bank said on Wednesday the U.S. economy was growing modestly, although it tempered optimism as the number of COVID-19 cases continues to surge.
"I don't think the Fed is serious about tapering anytime soon, given the pandemic situation and fragile economic recovery, however, any hint about tapering maybe in the slightly longer horizon will trigger some jitters among gold traders," DailyFX ‘s Yang said.
Meanwhile, investors are monitoring the ongoing political unrest in the U.S. ahead of Biden and his administration taking office on Jan. 20. Earlier in the day, the House of Representatives voted 232-197 to impeach incumbent President Donald Trump on the charge of inciting his supports to the Capitol Hill riot during the past week that left five dead and the building ransacked.
The vote opens Trump’s second impeachment, after little more than a year since his first and making him the first U.S. president to face two impeachments.