The yellow-gold metal slowly started its climb during the opening of the European session today after reaching a one-month low in yesterday's trading session.
Entering the European session, gold traded hovering around the $ 1,860 per ounce level, while gold futures were positive at $ 1,859 per ounce (3.05pm Malaysian time).
U.S. Treasury yields continued to rise at a 10-month high, as investors prepared for greater government spending under President Joe Biden's new administration.
The increase has prompted the US dollar to rise and is supported by expectations that the Federal Reserve (Fed) will stop easing this year due to the brighter economic outlook.
However, with more stimulus packages implemented, it will increase national spending and cause a deficit in the current account. This will push investors back to gold to protect them from inflationary risks.
Analysts expect inflation to rise above the Fed's 2% target as soon as April and this increase will be a major catalyst for gold prices to rise higher.
