Gold prices are reversing losses after sliding lower early on Thursday as the market sentiment turns positive over rising expectations for the new US administration under President Joe Biden to implement more fiscal stimulus measures and prop up the economy. At the time of writing, GOLD is trading at a little above $1,873.

Markets are trading with a risk-on sentiment a day after Biden’s inauguration as he signs orders to begin tackling the economic damage caused in the US by the ongoing coronavirus pandemic. The mood in the global financial markets has also been bolstered by the BOC and the BOJ electing to keep their monetary policies steady, while the ECB is also widely expected to do the same later today.

However, losses in gold remain limited as the world continues to grapple with a rise in fresh coronavirus infections despite the COVID-19 vaccine rolling out in several countries. The total number of deaths due to the pandemic has crossed 400k in the US alone even as the fresh infections touched a record high in the UK.

Japan is expected to extend its state of emergency, while Germany has also pushed its lockdown measures until February 14, as governments try to contain the spread of the virus. The possibility of more lockdowns and restrictions continue to support the safe haven appeal of gold as such measures can delay economic recovery.