Gold futures on Tuesday were edging up for a second session in a row as investors braced for the prospect of further fiscal stimulus to reflate the economy in the wake of the coronavirus pandemic when President-elect Joe Biden takes office on Jan. 20.
President-elect Joe Biden on Friday called for extra financial relief for Americans “now” after the latest U.S. jobs report showed losses for the first time in eight months, a reflection of the continued toll the coronavirus pandemic is taking on the economy. The private sector and government shed 140,000 jobs in December, the Bureau of Labor Statistics said.
Moves in Congress to impeach President Donald Trump for a second time for his role in inciting violent mob attacks on the Capitol building in Washington last week are also sparking some buying in bullion, dealers said.
“The reason is pretty simple, the risk-on trade has lost some popularity, and this drove the stocks lower,” wrote Naeem Aslam, chief market analyst at AvaTrade in a Tuesday research note, commenting on Monday’s retreat in equities.
“In addition to this, rising tension in Washington isn’t helping anyone, and this particular factor is also making investors adopt more cautious,” the analyst wrote.
However, a steady rise in the yields for long-term bonds, which can compete against gold for haven buying, could ultimately erode some appetite from precious metals. The 10-year Treasury note yield was at 1.17%, early Tuesday.
February gold was down $2.60, or 0.1%, at $1,848.70 an ounce, following a 0.8% gain on Monday.
Silver for March delivery was little-changed at $25.26 an ounce, after climbing 2.6% in the prior session.