Gold was up on Wednesday morning in Asia, with a weak dollar and growing expectation of further U.S. stimulus measures continuing to give the yellow metal a boost.
Progress continues to be made on a $1.9 trillion stimulus package proposed by U.S. President Joe Biden. Biden said on Tuesday that he agreed with a proposal by Democrat lawmakers that would limit or phase out of planned $1,4000 stimulus payments to higher-income individuals. The House of Representatives will vote on the bill on Feb. 22, with Speaker Nancy Pelosi pledging to secure congressional passage by mid-March, when enhanced jobless benefits approved in a December 2020 aid package expire.
However, Biden’s administration has largely ignored worries that massive stimulus spending and ultra-easy monetary policy will lead to inflation. On the other hand, Friday’s disappointing U.S. jobs data, including non-farm payrolls, highlighted the urgent need for the package to be passed by Congress quickly. The U.S. will release its Consumer Price Index (CPI) later in the day, after China released its own CPI figures earlier in the day. The Chinese CPI grew 1% month-on-month but fell 0.3% year-on-year, and the Producer Price Index (PPI) grew 0.3% year-on-year in January.
Investors also await comments from Federal Reserve Chairman Jerome Powell, who will speak at a virtual Economic Club of New York event later in the day.