Gold futures were trading higher Tuesday as the precious metal attempted to claw back from a weekly loss that drove the precious metal to its lowest settlement in seven weeks.
Trading for bullion comes against the backdrop of a softer U.S. dollar, as measured by the ICE U.S. Dollar Index The index was down 0.3% at 90.52 early Tuesday.
A weakening dollar is seen as bolstering the appeal of assets priced in the currency like gold.
February gold climbed $9.50, or 0.5%, to trade at $1,839.40 an ounce, after a 1.2% decline on Friday helped to drive gold to its lowest finish since Dec. 1 and weekly slide of 0.3%.
“Gold is edging higher, continuing the rebound started after the quick crash that brought the price close to the support zone of $1,800,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades.
A softer dollar also came as Janet Yellen, President-elect Joe Biden’s pick to run the Treasury Department, said in prepared remarks said that the U.S. needs to “act big” to combat the economic harm from COVID-19.
“But right now, with interest rates at historic lows, the smartest thing we can do is act big,” Yellen wrote in testimony prepared for delivery for her confirmation hearing before the Senate Finance Committee on Tuesday.
Her remarks come after Biden, last week, rolled out a coronavirus relief plan with a price tag of $1.9 trillion, a sweeping measure that includes cash payments to Americans and money for distributing COVID-19 vaccines.
Gold prices in the longer term are expected to rise amid greater government spending and a weakening buck.
Elsewhere in metals, silver for March delivery rose 44 cents, or 1.8%, to $25.31 an ounce, after a 0.9% fall last week.