Gold prices are on the rise in early trading on Wednesday, supported by a weakness in the US dollar and Fed chairman Powell’s latest statements that point to the US central bank maintaining its dovish stance until the economy recovers completely from the pandemic-inflicted downturn. At the time of writing, GOLD is trading at a little above $1,808.

On Tuesday, Powell testified before the Senate Banking Committee and held ground on the Fed’s decision to hold interest rates at low levels and continue with monetary easing. Despite worries about this move pushing inflation higher and causing an economic boom which could lead to additional risks, Powell maintained that Fed would continue with its decision until US inflation and employment levels return to pre-pandemic levels.

The possibility of Fed staying dovish even as economies around the world bounce back in the coming months is keeping the US dollar weak and boosting the safe haven appeal of gold. In addition, the yellow metal’s bullishness was also supported by a decline in the benchmark 10-year US Treasury yields, which reduces the opportunity cost of holding non-yielding bullion among investors.

Meanwhile, the Democrats in the US Congress are trying their best to finalize President Biden’s $1.9 trillion pandemic relief package. The rollout of more fiscal stimulus measures could further boost support the bullish trend in gold in the coming sessions.