(Updates prices)<\/p>\n
* Bitcoin jump also helping sentiment in gold, analysts say<\/p>\n
* Investors await progress on U.S. COVID-19 relief package<\/p>\n
* Interactive graphic tracking global spread of coronavirus: tmsnrt.rs\/3mvcUoa<\/p>\n
Feb 8 (Reuters) – Gold jumped more than 1% on Monday as expectations of a large U.S. economic stimulus package bolstered bullion\u2019s appeal as an inflation hedge.<\/p>\n
Spot gold rose 1.1% to $1,831.28 per ounce by 2:23 p.m. EST (1923 GMT). U.S. gold futures settled up 1.2% at $1,834.20.<\/p>\n
U.S. President Joe Biden and his Democratic allies in Congress cleared the path for a $1.9 trillion COVID-19 relief package as lawmakers approved a budget outline that will allow them to muscle the plan through without Republican support.<\/p>\n
U.S. Treasury Secretary Janet Yellen said on Sunday the country would get back to full employment next year if Congress approves the stimulus package.<\/p>\n
\u201cYellen talking about full employment by 2022 with $2 trillion in stimulus is driving the likelihood of a surge in inflation, which is good for gold,\u201d said Tai Wong, head of base and precious metals derivatives trading at BMO.<\/p>\n
Major U.S. stock indexes rose to record highs on the boost to economic recovery bets.<\/p>\n
The \u201cinflation trade\u201d could supersede any negative impact the dollar might have on gold and silver, said Jim Wyckoff, senior analyst with Kitco Metals.<\/p>\n
Gold also seemed to take some cues from another jump in Bitcoin, after Tesla Inc said it had invested around $1.5 billion in the cryptocurrency.<\/p>\n
In its 2020 annual report, Tesla also said it may invest in \u201ccertain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future.\u201d<\/p>\n
But \u201cBitcoin and gold have been basically uncorrelated. The current surge in Bitcoin may be adding to the sentiment, but is not a primary driver,\u201d BMO\u2019s Wong said.<\/p>\n
An interest in asset classes that are a store of value such as gold and silver, after Tesla\u2019s Bitcoin purchase, is helping prices, said David Meger, director of metals trading at High Ridge Futures.<\/p>\n
Meanwhile, silver rose 2.2% to $27.42 an ounce and platinum rose 3.2% to $1,159.73, while palladium fell 0.7% to $2,321.41.<\/p>\n