Daily Brief, Nov 19 – Everything You Need to Know About Gold!

Posted Thursday, November 19, 2020 by
Arslan Butt • 2 min read

Good morning traders,

Prices for the precious metal, GOLD, closed at 1,872.27, after placing a high of 1,884.82, and a low of 1,863.62. GOLD prices fell on Wednesday, after Pfizer Inc. announced that it was planning to file for an emergency authorization, after the final analysis showed that its vaccine had no significant safety issues.

The US drugmaker Pfizer and its German partner BioNtech said that their coronavirus vaccine was 95% effective and that they were planning to file for authorization in the US within days. This news raised the risk sentiment in the market and weighed on the safe-haven metal on Wednesday.

Meanwhile, the US is facing a battle against the pandemic, as the number of infections is increasing day by day. Governments are imposing restrictive measures to control the spread of the virus. For example, states like California and Illinois have extended their restrictions to combat the rising number of cases. Despite this, there is still no financial aid package in sight.

On the US stimulus package front, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said that talks on further fiscal stimulus should be resumed, and they appealed to Senate Majority Leader Mitch McConnell to make progress regarding the resumption of talks, despite McConnell sticking to his insistence on a targeted package.

These lockdown tensions, coupled with the economic recovery concerns and the push to resume talks for further stimulus, put further pressure on the US dollar, capping further losses in the gold prices on Wednesday. On the data front, at 02:00 GMT, the TIC Long-Term Purchases figures from the US for September were released, indicating an increase to 108.9B against the projected 41.5B, which lent support to the US dollar and put pressure on the gold prices. At 18:30 GMT, the Building Permits numbers came out – they were in line with the expectations of 1.55M. For October, the Housing Starts rose to 1.53M against the expected 1.45M, boosting the US dollar and adding to further losses in the gold prices on Wednesday.

Meanwhile, the GOLD losses remained limited, as the US dollar became weak on Wednesday, after reports suggesting that the death toll in the US now exceeds 250,000. The rising number of deaths from coronavirus raised fears in the market and weighed on the local currency, putting a lid on any further losses in gold. According to Johns Hopkins University, the number of people in the US who have died of the virus has reached 250,180. The US has the highest death toll and is among the worst-hit of the developed nations.

The record numbers of infections across the US are due to the Trump administration’s repeated failure to get a grip on the coronavirus crisis. Recently Trump has refused to concede that he has lost the presidency to Joe Biden, which has also weighed on market sentiment. The rising number of coronavirus cases in the US has forced US officials to announce that public schools in New York City will close again on Thursday, as the city has reached a 3% coronavirus test positivity rate. This kept the market sentiment cautious and capped further losses in the GOLD prices.


Daily Technical Levels
Support              Resistance
1,861.40              1,885.30
1,848.90             1,896.70
1,837.50             1,909.20
Pivot Point:       1,872.80The precious metal, GOLD, has had a bearish breakout at the 1,876 support level. Closing of candles below the 1,876 level is likely to drive the selling bias until the next support area of 1,865. A bearish breakout of 1,865 is likely to drive the selling trend until the 1,858 level. On the higher side, the resistance remains at the 1,876 mark. The bullish bias remains strong over 1,865, and below this, a selling bias could dominate the market. Good luck!

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