Gold is trading bullish at the beginning of a brand new trading week, finding support as a hedge against inflation as traders increasingly turn their attention towards the US releasing more fiscal stimulus to give its economy a boost. At the time of writing, GOLD is trading at a little above $1,853.

The Biden administration is widely expected to focus its efforts on rolling out the proposed $1.9 trillion stimulus package even as it aims to produce and distribute COVID-19 vaccines efficiently across the country. Janet Yellen received a unanimous approval from the US Senate Finance Committee and could soon get confirmed as the next Treasury Secretary in the US. Yellen has previously stressed the need for more financial aid to prop up the economy – a move that could lend further support to gold in the near future.

The yellow metal is also trading stronger after reports revealed an improvement in demand for physical gold across China and Singapore ahead of the upcoming Chinese New Year holiday season. China is the world’s largest consumer of physical gold and an increase in demand is helping prices climb higher, as a result.

The safe haven appeal of gold has strengthened further in the wake of rising number of coronavirus cases being reported across the world, including China, prompting governments to announce tighter lockdowns and restrictions. While the lockdowns could potentially curb the spread of infection, they also bring economic activity to a halt, driving further damage to the global economy due to the pandemic.