PRECIOUS-Gold eases on doubts over U.S. stimulus passage

(Updates prices)
* Dollar index fell 0.1% against key currencies
* U.S. Fed's policy meeting due on Jan. 26-27
* Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3mvcUoa

By Sumita Layek
Jan 25 (Reuters) - Gold prices inched lower on Monday due to
concerns that a massive economic stimulus in the United States
may not be passed smoothly, although a weaker dollar limited
bullion's losses.
Spot gold XAU= fell 0.1% to $1,850.91 per ounce by 0822
GMT, having dropped 0.9% in the previous session. U.S. gold
futures GCv1 fell 0.2% to $1,851.80.
U.S. President Joe Biden's administration tried to head off
Republican concerns that his $1.9 trillion pandemic relief
proposal was too expensive on a Sunday call. "We're seeing bigger question marks over the passage of
Biden's stimulus package, Senate Republicans are starting to
object with particular parts of the package," said Lachlan Shaw,
National Australia Bank's head of commodity research.
"So, it does raise the question about the speed and the
timing of the package. (Although,) some of the issues of the
vaccine delays in the U.S. are perhaps tilting the balance in
odds of favour of that stimulus," Shaw added.
Gold is considered a hedge against inflation, likely from
widespread stimulus.
U.S. coronavirus cases crossed 25 million on Sunday as pace
of vaccinations remained sluggish, while the European Union's
vaccination drive was hit by AstraZeneca Plc's production
problems. The dollar .DXY shed 0.1% against rival currencies, making
gold attractive for holders of other units. USD/
Investors now await the U.S. Federal Reserve's policy
meeting due on Jan. 26-27.
"The Fed is likely to take the conservative course and wait
for additional data and assume fragility, given that the
short-run effects of tackling COVID-19 more aggressively could
weaken domestic economic activity," said Nicholas Frappell,
global general manager at ABC Bullion.
"The longer term outlook and technical support remain
bullish," so with prices above $1,840, gold could move back up
to $1,870-$1,880, he added.
Silver XAG= gained 0.3% to $25.47 an ounce, platinum
XPT= rose 0.1% to $1,099.41, and palladium XPD= lost 0.1% to
$2,351.84.