Gold prices are on the rise in early trading and are all set to post the best performance seen in seven weeks following a weakness in US Treasury yields making the yellow metal more attractive as an investment. At the time of writing, GOLD is trading at a little above $1,718.

So far this week, gold prices have strengthened by as much as 1.4% – the highest weekly gain seen since late January. After touching a one-year high and rising above 1.6% late last week, the benchmark 10-year US Treasury yields have slid lower to around 1.5%, driving weakness in the dollar which shares a negative correlation with the safe haven metal.

Gold is also enjoying support from President Biden signing the latest COVID-19 relief package into law, which will unleash more fiscal stimulus to prop up the US economy. The possibility of more stimulus measures for the US economy are increasing the safe haven appeal of the precious metal and aiding its bullish moves for now.

However, going forward, a speedier recovery for the US economy driven by these latest measures is likely to keep the dollar supported and exert downward pressure on gold prices. Gains in the yellow metal have also been restricted by an improvement in the US labor market after the latest weekly jobless claims report revealed that the number of fresh claims being filed had fallen to the lowest level seen in four months during the past week.