By Gina Lee
Investing.com – Gold was up on Tuesday morning in Asia, steading after the yellow metal recorded its biggest two-day gain in a month. Hopes pinned on further stimulus measures in the U.S. and a weaker dollar continued to drive gold’s gains.
Gold futures were up 0.47% at $1,842.80 by 11:31 PM ET (4:31 AM GMT). The dollar, which normally moves inversely to gold, was down on Tuesday.
Democrat lawmakers released the first draft of legislation that will comprise U.S. President Joe Biden’s COVID-19 bill. Bets on a robust package are increasing inflation concerns and are driving the reflation trade.
Gold is rebounding from its retreat during the previous week to the lowest level since early December 2020. The retreat was driven by a stronger dollar and rising U.S. Treasury yields.
“Gold is rallying from a two-month low as Biden’s massive $1.9 trillion plan is about to become a reality … the economic recovery is weak, and prospects are growing that more will be done. The reflation trade is happening a lot faster than expected,” Oanda Corp. senior market analyst Edward Moya told Bloomberg.
Investors also await comments from Federal Reserve Chairman Jerome Powell, who will speak at a webinar on Wednesday.
Another market focus was cryptocurrencies, with Bitcoin surging to record levels on Monday after Tesla Inc. (NASDAQ:TSLA) bought $1.5 billion of the cryptocurrency and hinted that it would accept cryptocurrencies as a method of payment. The company also said that revised policies will allow it to invest in gold.