Gold prices rose on Monday, recovering from a sharp decline in the previous session, as investors hoped that a massive economic stimulus would be passed soon in the United States to revive the world's largest economy.

Spot gold rose 0.3% to $1,858.57 per ounce by 0039 GMT, having slipped 0.9% in the previous session. U.S. gold futures were little changed at $1,856.60.

The Joe Biden administration and Democratic and Republican lawmakers discussing a new $1.9 trillion in coronavirus relief agreed on Sunday that the most important priority should be producing and efficiently distributing a vaccine.

The U.S. Senate Finance Committee on Friday unanimously approved Janet Yellen's nomination as the first woman Treasury secretary, indicating that she will easily win full Senate approval on Monday.

Yellen at her confirmation hearing last week urged lawmakers for large coronavirus relief spending, adding that the benefits outweigh the expenses of a higher debt burden.  

Gold is considered a hedge against inflation, likely from widespread stimulus.

 

Global coronavirus cases rose to more than 98 million as countries continued to work on the pace of vaccinations.

Demand for physical gold picked up last week as the approaching Chinese New Year encouraged buyers in China and Singapore.