By Gina Lee
Investing.com – Gold was up on Wednesday morning in Asia, boosted by a weaker dollar. Investors are also digesting the news that U.S. Senate Majority Leader Mitch McConnell postponed a vote on increasing the amount of U.S. stimulus checks.
Gold futures were up 0.32% at $1,888.85 by 11:40 PM ET (4:40 AM GMT). The {{8827|dollar}, which usually moves inversely to gold, was down on Wednesday morning.
“A weaker dollar is enough to create a small upward momentum for confidence to be maintained in gold,” AirGuide director Michael Langford told CNBC.
McConnell delayed a vote on increasing the amount on the stimulus checks from $600 to $2,000 on Tuesday, after the House of Representatives and President Donald Trump both approved the increase earlier in the week.
However, Treasury Secretary Steven Mnuchin said that distribution of the approved $600 stimulus checks would begin as soon as Tuesday evening.
The Federal Reserve also extended the end date for its Main Street Lending Program by eight days to Jan. 8, in order to process a flood of applications that were submitted since Mnuchin ended the central bank's emergency credit facility in November.
All eyes are now on runoff elections in Georgia, due to take place on Jan. 5, that will determine whether the Democrats or Republicans control the Senate.
Should the elections result in victory for the Democrats, expectations of a continuous loose fiscal policy will weigh on the dollar and be bullish for precious metals, Phillip Futures senior commodities manager Avtar Sandu said in a note.
Meanwhile, COVID-19 vaccine rollouts continue globally, with the European Union set to purchase a further 100 million doses of BNT162b2, the vaccine developed by Pfizer Inc (NYSE:PFE) and BioNTech SE (F:22UAy).
The number of global COVID-19 cases continues an incessant increase. The U.S. has also reported its first case of the B177 strain of the COVID-19 virus, first seen in southeastern England in September.