Daily Brief, Dec 15 – Everything you Need to Know about Gold!

The Pfizer-BioNtech vaccine – which was produced through collaboration between the US pharmaceutical giant and the German biotech company – offers up to 95% protection from the coronavirus. It is the first coronavirus vaccine to be approved by the US regulatory authority, the FDA. The same vaccine has already been rolled out in the UK, while Canada also began its vaccination program on Monday, with an initial 30,000 doses going to 14 sites across the country. The vaccine rollouts eased the risk sentiment in the market, as the hopes for global economic recovery increased, weighing on the safe-haven yellow metal on Monday.

The main indexes in the Wall Street Journal also improved during the first half of the day, as investors were optimistic about the vaccine rollouts and updates about the new coronavirus relief packages.

The Dow Jones Futures were up by 248 points or 0.8%, the S&P Futures were up by 0.8% and by 28 points, and the NASDAQ climbed by 75 points or 0.6% in the early trading session on Monday. Meanwhile, as the death toll in the US has surpassed the 300,000 mark, investors were keen to hear from Congress about the next round of the US stimulus package. Congress faced more pressure than ever this week to pass another round of financial aid for the coronavirus relief bill.

The latest $ 908 bipartisan coronavirus relief package was introduced in the US Congress session on Monday. It is split into two packages – one bill is a $ 748 billion proposal, including money for small business loans, jobless benefits and vaccine distribution, and the second bill will include $ 160 billion for state and local aid, which will encompass liability protection for businesses and other entities. The hopes for further stimulus from Congress weighed on the US dollar and capped further losses in the yellow metal prices on Monday.

Meanwhile, investors await the US Federal Reserve’s two-day policy meeting that will start on Tuesday with bets for increased purchases of longer-dated treasuries to contain a rise in yields. This also weighed on the US dollar and limited the losses in the GOLD prices on Monday.

The technical side of the market remains unchanged, with gold consolidating in a narrow trading range between 1,847 and 1,822, on the back of a thin trading volume and volatility. The market often reports such thin volatility during mid-December, as traders begin to wind up their positions ahead of the holiday session. A bullish breakout at the 1,847 level could lead to higher gold prices until the next resistance level of 1,851, along with a support level of 1,830 and 1,824. The trading bias continues to exhibit a neutral bias. Good luck!