Since the 14th hour and 50 minutes EST gold trading has been declining by $ 12.10 and is currently set at $ 1827.40. At a closer inspection of the market, participants are offering lower gold today at $ 17.60. However a dollar weakness contributed $ 5.60 in gains, resulting in today’s price decline of $ 12.10.
As of 14:50 PM EST gold futures bases Comex’s most active contract in February 2021 is set at $ 1830.50, after taking into account today’s price decline of $ 13.10 (-0.72%). Currently the dollar index is declining about 3/10 percent and is set at 90.65, which is a net decrease of 0.274 points.
A combination of fundamental factors prompted the sale in gold today. The fact that Covid-19 vaccine has received urgent use from the FDA, and as of today began to vaccinate the candidates of the first level. This includes medical workers and first responders. After vaccination the vaccines of these individuals will be transferred to those most receptive who are elderly in nursing homes or group housing for the elderly. There is a warning; the vaccine will not be available to the general public until 1 p.m.st or 2nd quarter of 2021.
The second main reason that market participants have seen gold trading under pressure today is the growing concerns and doubts about whether or not The Senate will be able to agree to a second round of fiscal stimulus to help individuals and businesses most negatively affected by the pandemic. Reports emerged through the Wall Street Journal that the House and Senate are close to a compromise that could provide $ 160 billion in state and local aid and compensation projections in a separate stimulus package to test compromise and possible legislation before the end. of the year.
Another important event this week that will focus on gold investors and traders is the upcoming FOMC meeting, which is the last to take place in 2020. Although it is expected that no major policy changes will take place after this week’s FOMC meeting, which will begin on Tuesday. and ends on Wednesday. The real concern according to Daily-FX is that “the Fed may continue to talk the U.S. dollar lower, leaving the path of least resistance lower for the dollars.”
There is general optimism that a vaccine will go into action this week, and the government continues to negotiate a stimulus package that could be implemented before the end of the year. However, there is still no agreement on the stimulus aid, and the vaccine will take many months before it is available to the general public.
When these two remarks come to light some clarity influencing whether an agreement will be reached or not and a stimulus bill will be passed this year. This unresolved issue along with the unknown time before a vaccine is readily available to the public, creates great unknowns and uncertainty. This uncertainty can quickly change market sentiment in gold, which is currently bearish to bullish behavior.
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