Daily Brief, November 26 – Everything You Need to Know About Gold Today!
Arslan Butt • 3 min read
Good morning traders,
The precious metal, GOLD, closed at 1,807.68, after placing a high of 1,817.69, and a low of 1,801.58. Gold prices remained flat throughout the day, on the back of the mixed market sentiment. However, during the first session, the gains were lost, due to the prevailing optimism regarding the potential coronavirus vaccines. Gold was already under pressure, because of increased optimism and the rising risk sentiment in the market. The increased certainty boosted the market confidence in the US political process, as it has been announced that President-elect Joe Biden can finally begin his transition to the White House. Another major factor that has played an essential role in increasing the risk flow in the market is the growing optimism that vaccines will soon be available soon to prevent the coronavirus. AstraZeneca reported upbeat results for its vaccine on Monday, Pfizer and BioNtech have already filed for emergency use authorization for their vaccine, and Moderna has said that it will file for emergency use authorization in the coming weeks, after establishing the efficacy of its vaccine.
These vaccines have been awaited with anticipation, and they are sorely needed to prevent the economies from falling into a double-dip recession, therefore, any positive news regarding vaccine progress has a significant impact on the gold prices, which act as a hedge against inflation and currency debasement. On the data front, at 18:30 GMT, the US Prelim Gross Domestic Product figures for the third quarter were released, coming in line with the expectations of 33.1%. The Unemployment Claims from last week rose to 778K, against the expected 732K, weighing on the US dollar. The Core Durable Goods Orders for October grew to 1.3%, against the projected 0.5%, lending support to the greenback. The Durable Goods Orders also increased, rising to 1.3% against the anticipated 1.0%, likewise boosting the US dollar. The Goods Trade Balance from the US for October came in as expected, at -80.3B. The Prelim Wholesale Inventories for October increased to 0.9%, against the expected 0.4%, putting the greenbck under pressure.
At 18:36 GMT, the Prelim GDP Price Index for the third quarter was released – it also remained flat at 3.6%. At 20:00 GMT, the Revised UoM Consumer Sentiment figures for November also met with the projections of 76.9, as did the Core PCE Price Index for October, which were in line with the projection of 0.0%. The New Home Sales for October rose to 999K, against the forecasted 972K and supported the US dollar. The Personal Income declined to -0.7% from the expected 0.0%, weighing on the greenback. On the contrary, the Personal Spending rose to 0.5% from the projected 0.4%, boosting the US dollar. The Revised UoM Inflation Expectations for November also remained flat at 2.8%. An unexpected rise in the US unemployment claims on Wednesday somewhat dampened the optimism surrounding the coronavirus vaccine news, helping gold to move upward in the earlier session.
Furthermore, the state and local governments of the USA have started to plead with Americans to stay home at Thanksgiving. The Americans are having a hard time, due to rising numbers of coronavirus cases from the region. This challenging environment triggered fresh warnings from US health officials, as the release of the first vaccines is still weeks away.
Given the disruption throughout the country, due to the coronavirus pandemic, President-elect Joe Biden also joined in the calls for safety, urging people to forgo big family gatherings, wear protective masks and maintain social distancing.
The rising number of coronavirus cases and the country’s worsening pandemic situation kept the US dollar depressed and supported the upward movement of gold prices on Wednesday, but this did not last too long, due to prevailing optimism in the market. The market participants will now wait for the minutes of the upcoming Fed meeting .
Daily Technical Levels
Pivot Point: 1,807.07
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!