Daily Brief, December 10 – Everything You Need to Know About Gold Today!
Arslan Butt • 3 min read
According to the bipartisan proposal released by a group of moderate lawmakers last week, Congress should deliver new federal unemployment benefits for tens of millions of jobless Americans, to the tune of $ 180 billion. This support would be enough to fund federal supplementary unemployment benefits of $ 300 per week and extend various unemployment programs that are set to expire at the end of the year.
Meanwhile, on Wednesday, the US House of Representatives approved a one-week extension of federal government funding, that would give lawmakers more time to agree on a massive coronavirus relief package. However, Senate Majority leader Mitch McConnell said that lawmakers were still looking forward to a relief package.
These developments raised the uncertainty surrounding the US stimulus package and supported the US dollar, ultimately weighing heavily on gold prices on Wednesday. Furthermore, the losses in the gold prices were further increased after US health officials offered a glimmer of hope when they announced that vaccinations could begin as soon as this weekend, and that the states have escalated plans for distribution of the vaccine.
Moreover, the risk sentiment deteriorated after the latest news from Great Britain, where the vaccition process has already started. The optimism over the coronavirus vaccine diminished after Britain’s pharmaceutical regulator warned people with significant allergies against vaccination with Pfizer-BioNtech’s coronavirus vaccine, after two people suffered adverse reactions.
This news from the UK helped to limit losses in the GOLD prices on Wednesday, as this news adversely affected the optimism that has lifted the risk sentiment on the market. On the data front, at 20:00 GMT, the Final Wholesale Inventories for October were released, showing a rise to 1.1% against the expected 0.9%, which put pressure on the greenback. The JOLTS Job Openings for October also increased, coming in at 6.65M against the projected 6.30M, which boosted the US dollar and added to the losses in the GOLD prices on Wednesday.
Pivot Point: 1,847.32
In the absence of any additional US fiscal stimulus to support the economy through the coronavirus pandemic, the GOLD prices fell, due to the strength of the US dollar against other major currencies. GOLD is currently trading at the 1,840 level, facing immediate resistance at 1,851, and support at 1,833 and 1,826. The US Inflation data may help determine further GOLD trends today; however, the technical side seems bearish at the moment. Good luck!