Daily Brief – December 03 – Everything You Need to Know About Gold Today!
Arslan Butt • 2 min read
Good morning traders,
The GOLD prices closed at 1,830.42, after placing a high of 1,832.39, and a low of 1,807.41. On Wednesday, GOLD rose again, settling above the $ 1,830 level, as the yellow metal tried to recover from the beatings it received in November, when breakthroughs in COVID-19 vaccines diverted money from the safe-haven into risk assets. GOLD prices rallied on the notion that the world will soon be free from the pandemic.
The prospects of a US coronavirus relief package being approved soon strengthened the appeal for safe-haven GOLD, as a hedge against likely inflation, which sent the US dollar into the deepest trough in several years. On Tuesday, top US economy officials urged Congress to provide more help for small businesses, to enable them to cope with the pandemic, and support for a $ 1.4 trillion spending bill is growing.
Meanwhile, Philadelphia Federal Reserve Bank President Patrick Harker said that economic growth in the US was moderate, due to the increased spread of the coronavirus and faded hopes of fiscal help, not to mention that the jobs of some workers had been permanently eliminated, with the result that they are facing an especially hard road ahead.
Harker predicted moderate growth for the rest of this year and the first quarter of 2021. He also expected the economy to stay below pre-pandemic levels. Harker also expects growth to pick up in the second half of next year, if a coronavirus vaccine becomes widely available next spring or summer. Harker said that more fiscal support was needed to get the economy to that point, and to support low-income households.
Speaking about the Fed’s actions to support the economy during the pandemic, Harker said that the central bank’s emergency lending programs should be extended beyond year-end. The facilities, which support lending to small and medium-sized businesses, as well as state and local governments, and which act as a backstop for the corporate bond market, are due to end on December 31, as Treasury Secretary Steven Mnuchin has asked the Fed to return the unused funds.
On the data front, at 18:15 GMT, the ADP Non-Farm Employment Change for November came in, showing a decline to 307K against the expected 433K, weighing on the US dollar and adding further strength to gold prices. Furthermore, many investors believe that the recent rise in the GOLD prices is due to technical recovery. However, the gains in the precious metal could also be attributed to the renewed emphasis on a the release of a second coronavirus stimulus package.