Gold gains as dollar extends slide, stimulus hopes firm

Gold prices rose to a near one-week high on Tuesday as the dollar faltered and expectations firmed that a massive US fiscal stimulus to revive the world's largest economy will soon be passed.

Spot gold rose 0.6% to $1,841.11 per ounce by 0304 GMT, having hit $1,842.30 earlier in the session, its highest since Feb. 3. US gold futures gained 0.4% to $1,841.70.

"The main driver for gold is the confidence around US President Joe Biden's relief bill and the expectation of a further weakening of the U.S dollar which will come as a result of the aid," said Michael Langford, director at corporate advisory AirGuide.

The dollar fell to an over one-week low against rival currencies, making gold cheaper for holders of other currencies.

Biden's $1.9 trillion COVID-19 relief package is expected to pass through Congress before March 15 even without Republican support.

Gold is considered a hedge against inflation and currency debasement, likely from widespread stimulus.

A record surge in Bitcoin also boosted some sentiment, analysts said.

The non-farm payrolls data last week has bolstered bets the easy monetary policy is with us for a bit longer than expected, said DailyFX currency strategist Ilya Spivak.

However, higher inflation data along with vaccine adoption and easing lockdowns can nudge the Treasury yields higher and weigh on gold, Spivak added.

Investors will now be focused on Federal Reserve Chairman Jerome Powell's speech before a virtual Economic Club of New York event at 1900 GMT on Wednesday.

Among other precious metals, spot silver gained 1% to $27.53 an ounce, palladium climbed 0.4% to $2,339.33.

Platinum rose 1.7% to $1,176.80, having earlier hit its highest since August 2016 at $1,180.50.