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Gold Hovers Near Two-week High

Gold prices were flat to slightly higher on Thursday and the U.S. dollar eased, reflecting relief over an orderly transition of power and amid bets on increased U.S. government spending under President Joe Biden's administration.

Spot gold held steady at $1,871.74 per ounce, after having hit its highest since Jan. 8 at $1,874.50 earlier in the session. U.S. gold futures were up 0.3 percent at $1,871.40.

Inflation expectations are on the rise, given the very dovish approach from U.S. Treasury secretary nominee Janet Yellen as well as Biden's stance towards fiscal stimulus.

Gold is considered a hedge against inflation and currency debasement that can result from stimulus measures.

Investors await the latest ECB policy announcement, with focus on the post-meeting news conference by President Lagarde and her comments on the economic outlook.

No additional action is expected but the central bank may sound a bit dovish in its bid to continue devaluing the euro.

Earlier in the day, the Bank of Japan left its monetary policy unchanged, raised growth projections and noted that risks to both economic activity and prices were skewed to the downside.

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