Gold Price Decline Pauses On Political Unrest In Washington, Stimulus Bets

On Tuesday, the relentless decline in gold prices paused after Democrats began the process of impeaching President Donald Trump for a second time on Monday.

The Democrats have introduced a resolution calling on Vice-President Mike Pence to invoke the 25th Amendment of the Constitution and remove Trump from the White House.

In the international market, Spot Gold was steady at $1,845.19 per ounce as Asian stocks traded lower (ahead of Indian market's opening), dragged by political unrest in Washington and rising global COVID-19 cases, outweighing a firmer dollar and US Treasury yields.

Gold prices in India saw similar gains on Tuesday.

Gold futures on MCX (Multi Commodity Exchange of India) opened slightly higher at Rs 49,320 per 10 grams after closing with marginal gains at Rs 49,300 on Monday at 11.55 pm, post the announcement on impeachment.

Further, benchmark Treasury Yields held firm at 10-month highs as investors adjusted for higher government stimulus under the Joe Biden administration, helping the dollar rebound, weighing on gold's gains.

Higher bond yields increase the opportunity cost of holding the non-interest yielding gold.

Apart from the charges on Trump, global investors also have an eye on the increase in the number of COVID-19 infections that has surpassed 90.37 million.

Last week, gold prices corrected sharply on cues from the international market where traders increased their short position as seen by the open interest.

At 11.55 pm on Friday, gold futures (February 2021) on MCX closed 4.10% or Rs 2,086 lower at Rs 48,818 per 10 grams.