By Sergio Held
Investing.com – After a week trending downwards, gold was up Friday morning in Asia as investors waited for news from the U.S. on a $1.9 trillion stimulus package proposed by President Joe Biden.
were up by 0.15% at $1,844.00 by 09:53 PM ET (02:53 AM GMT).
The moves in gold followed news overnight that U.S. GDP contracted 3.5% for all of 2020, the worst contraction since 1946, after the Second World War.
Despite and the impact of the pandemic across the globe, demand for gold fell to its lowest since 2009, according to the World Gold Council.
“The coronavirus pandemic, with its far-reaching effects, was the driving factor behind weakness in consumer demand throughout 2020, culminating in a 14% decline in annual demand to 3,759.6t, the first sub-4,000t year since 2009,” the London-based organization said.
The U.S. rescue package could put pressure on gold prices even by helping shore up economic growth.
“Without swift action, we risk a continued economic crisis that will make it harder for Americans to return to work and get back on their feet,” said Brian Deese, economic advisor to the White House, on Thursday.
Gold Investors will be on the lookout for clues on the movement of the package and other economic measures to curb the impact of COVID-19.
The International Monetary Fund (IMF) said on Thursday that fiscal spending was needed to limit the economic impact of the pandemic.
“Because of this crisis, fiscal spending was needed. That increase in fiscal spending alongside the output collapse has raised debt levels to record highs in many countries,” said Gita Gopinath, economic counselor, and director of the research department at IMF. “The fact that we have low interest rates and because we have growth now coming back in 2021, that should help stabilize debt levels in many countries. But it is very important for all countries to have medium-term fiscal frameworks that ensure that debt remains sustainable.”
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