Gold trading continued to face pressure ahead of the European session after plunging lower during Tuesday's trading session due to the strengthening of the US dollar.
Spot gold traded gloomy around the $ 1,837 per ounce level as the market headed for the European session, while gold futures traded at $ 1,839 per ounce (2.25pm Malaysian time).
The yellow metal had a sharp fall from $ 1,860 to $ 1,830 an ounce on Tuesday, as greenback dollar trading soared to a 2-month high of most major currencies.
This is driven by the growing prospect of a US economic recovery following expectations of greater stimulus and the launch of the Covid-19 vaccine which is also running smoothly.
Democrats in the U.S. Senate have begun debating as a first step toward approving a $ 1.9 trillion stimulus package proposed by President Joe Biden, albeit without Republican support.
Typically, gold will benefit from the implementation of larger fiscal stimulus measures as it is considered a hedge against inflation.
However, for now market sentiment is more in favor of the US dollar which is also supported by the strengthening in US treasury yields which shows investor confidence in the economic recovery.
