By Gina Lee
Gold futures were up 0.66% at $1,671.75 by 1:08 AM ET (6:08 AM GMT), while the dollar was down on Monday.
Investors are turning their focus to Fed Chairman Jerome Powell, who is scheduled to appear before the U.S. Congress later this week, for further guidance on the Fed’s approach to inflation. Other Fed committee members, including Charles Evans, Raphael Bostic, Lael Brainard, James Bullard, Mary Daly and John Williams (NYSE:WMB), are also scheduled to deliver speeches.
“The focus on Jerome Powell will be how much he is going to try to sway the Senate to provide more stimulus, more stimulus in the U.S. could lead to a weaker U.S. dollar and that would be positive for gold,” AxiCorp chief market strategist Stephen Innes told CNBC.
A surge in new COVID-19 cases in Europe also helped cap loses, with the U.K. contemplating a new national lockdown. Countries such as Denmark and Greece already re-implemented restrictive measures during the previous week.
Gold has seen a surge of around 29% in the year-to-date on the back of government and central bank stimulus measures aimed at countering COVID-19’s impact. The yellow metal “remains in a range-trading mode, with resistance at $1,975.00, and support at $1,935.00 an ounce,” OANDA senior market analyst Jeffrey Halley said in a note.
But AxiCorp’s Innes suggested that the slowly but generally improving economic situation and the prospects of a vaccine could mean that gold could struggle to top the $2,000 level for the remainder of the year.