Daily Brief, November 25 – Everything You Need to Know About Gold Today!
Posted Wednesday, November 25, 2020 by
Arslan Butt • 2 min read
Arslan Butt • 2 min read
As the optimism regarding the coronavirus vaccine increased in the market, the safe-haven demand started to decline, weighing on the GOLD prices. GOLD collapsed on Tuesday, extending its losses of the previous day, as Wall Street reached higher. The Dow Jones hit its highs above 30,000 points, which added gains to three major US stock indexes, raising them by 1.5% each.
The rally in Wall Street followed Monday’s progress report on the developments regarding AstraZeneca’s coronavirus vaccine. The British-Swedish drug company said its product was 70% effective in providing protection against the coronavirus and could reach 90% with administration of a second dose. It also reported that its vaccine could be stored in an ordinary refrigerator and that it was likely to be cheaper than rival vaccines from Pfizer and Moderna, which are reported to be 95% efficient, but which have more challenging storage requirements.
Furthermore, the risk-on market sentiment was also supported by the latest news from the White House, where a federal agency formally gave US President-elect Joe Biden the go-ahead to begin his transition to the presidency. The US General Services Administration (GSA), an independent agency, declared Biden as the winner of the election and informed him that the presidential transition leading up to January 20 could officially begin. The White House also gave Biden the go-ahead to escalate the fight against the coronavirus. All this positive news kept the risk-on market sentiment supported and weighed on the GOLD prices.
On the data front, the Housing Price Index for September rose to 1.7%, against the projected 0.8%, boosting the US dollar. The S&P/CS Composite -20 HPI for the year also increased, rising to 6.6% against the estimated 5.3%, likewise supporting the US dollar and ultimately putting further pressure on the GOLD prices. At 19:59 GMT, the Richmond Manufacturing Index figures were released, showing a decline to 15 points from the estimated 20, which weighed on the US dollar. The most awaited CB Consumer Confidence from the US was released at 20:00 GMT, also showing a decline to 96.1 against the projected 97.7 and putting pressure on the US dollar, which in turn capped further losses in the GOLD prices on Tuesday.
The precious metal, GOLD , slipped sharply from the 1,832 level to 1,790, holding below an immediate resistance area of 1,832. Closing of candles below the 1,832 level is likely to trigger a further selling trend until the next support level of 1,794. As we can see on the 2-hour timeframe, GOLD has violated the symmetric triangle pattern, driving a strong bearish movement in the market. The MACD and RSI are in support of the selling trend. Let’s consider staying bearish below the 1,812.87 level today, and buying over 1,812.87 should be preferred. Good luck!