NEW YORK: Gold eased on Tuesday in choppy trading that earlier saw it climb as much as 1% as a surge in US Treasury yields outweighed support from bets on higher inflation as Washington rolls out more stimulus.

Spot gold was 0.2% lower at $1,840.91 per ounce at 11:49 a.m. EST (1649 GMT). On Monday, prices touched their lowest level since Dec. 2. US gold futures were down 0.6% at $1,840.60.

“We’ve still got COVID-19 raging and offsetting that is the vaccine rollout and looking out, in the springtime maybe the worst will be past,” said Kitco Metals senior analyst Jim Wyckoff, adding that a rebound in the dollar index and rising yields remain a near-term negative for gold.

Democrat control of the US Senate has raised bets for new US fiscal stimulus, lifting the yield on benchmark 10-year notes to its highest since March.

Gold is generally considered a hedge against the inflation and currency debasement that can result from widespread stimulus. However, higher bond yields have challenged that status recently as they increase the opportunity cost of holding non-yielding bullion.

“There’s going to be a big stimulus package that should be supportive for the gold market, it can not only stimulate demand but also prompt ideas of some problematic price inflation,” Wyckoff added.

US President-elect Joe Biden said Americans needed more economic relief from the COVID-19 pandemic and that he would deliver a plan costing “trillions” of dollars.

While gold was still vulnerable in the short term to gains in the dollar and yields, “the macro picture is still positive for gold,” said Nicholas Frappell, global general manager at ABC Bullion.

Silver gained 1.4% to $25.28 an ounce. Platinum climbed 1.9% to $1,051.46, while palladium was down 0.1% at $2,369.62.