- Gold gains almost 1%, dollar drops on US stimulus news.
- Risk appetite strengthens as President Trump signs the coronavirus relief bill.
Gold, widely touted as a hedge against inflation and currency devaluation, is cheering the US President Trump's decision to sign the critical coronavirus relief and spending package.
The package includes direct payments to qualifying Americans worth up to $600 per adult and child, a boost in weekly unemployment benefits, and funds for small-business aid and vaccine distribution, according to nrp.org.
The move announced roughly an hour ago is the first major pandemic relief legislation since the $2 trillion CARES Act approved in March and will provide much-needed economic relief to millions of Americans.
As such, markets have responded positively, sending risk assets and inflation hedges like gold higher and the safe-haven US dollar lower. Some economists believe the bill's financial aid should be higher to get the economy moving again.
The yellow metal has gained 25% this year, mainly on the back of the unprecedented inflation-boosting monetary and fiscal stimulus programs launched by authorities worldwide to counter the coronavirus-induced economic slowdown. Gold reached a record high of $2,075 in August and was last seen trading near $1,898, representing a nearly 1% gain on the day.
Technical levels
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