Good morning traders,
Prices for the precious metal, GOLD, closed at 1,876.43, after placing a high of 1,906.67, and a low of 1,854.98. GOLD prices rose in the early trading hours and surpassed the $ 1,900 level, amid the latest news about the US stimulus relief bill. However, the gains did not last long before the GOLD prices started to edge down, as fears of the new coronavirus strain hit the market and investors started to opt for the greenback.On Sunday, the Congressional leaders reached a hard-fought agreement on a $900 billion stimulus package that would send immediate aid to American citizens and businesses, to help them cope with the economic devastation caused by the pandemic, and to fund the distribution of vaccines.
Treasury Secretary Steven Mnuchin said that the latest bill would include provisions akin to those in the original CARES Act, which was the 2.2 trillion relief package approved in March. Individuals, including children, will receive $ 600 each in direct payments. A family of four could end up with $ 2,400. The payments decrease for people who made more than $ 75,000 during 2019. They are phased out entirely for people who made above $ 99,000 that year.Democrats say that the bill will put $ 284 billion into a Paycheck Protection Program and small business loans. The new bill will also direct another $ 20 billion towards small business grants and $ 15 billion to live event venues. It will also include billions of dollars for testing, tracing, and vaccine distribution, as well as $ 82 billion for colleges and schools and $ 25 billion in rental assistance.
GOLD prices rose above the $ 1,900 per ounce just hours after the headlines emerged that rival lawmakers in congress had agreed on a $ 900 billion stimulus bill for pandemic relief.
However, the gains in the GOLD
prices didn’t last long before the rebounding dollar triggered a pullback. The US dollar became strong across the board, weighing heavily on the yellow metal on Monday, as the spread of a highly-infectious new strain of the coronavirus in the UK raised the demand for safe-havens. Investors opted for the greenback, on the back of the rising demand for safe-havens, sending the GOLD
prices in the opposite direction.
Given the mutant coronavirus, GOLD
is under pressure, due to fears of the virus spreading, which has resulted in more than 40 countries banning UK arrivals. France has shut its border with the UK for 48 hours, meaning no lorries or ferries can leave from Dover. PM Boris Johnson is facing intense pressure to impose another national lockdown within days, as more than 40 countries have banned arrivals from the UK, in an attempt to keep out the new, fast-spreading variant of the coronavirus.
The chaos increased after Health Secretary Matt Hancock warned that the new variant of the virus, which is 70% more transmissible, was getting out of control. The new variant has spread quickly in London and south-east England, but health officials said there was no evidence that it was more deadly or that it would react differently to vaccines. However, the fears triggered by this new coronavirus strain were enough to lift the demand for the greenback, which put pressure on the yellow metal on Monday.
Daily Technical Levels
Pivot Point: 1,885.02
is trading in a narrow range between 1,884 and 1,874, and violation of this range on the lower side could extend the selling trend until the 1,862 level. Simultaneously, the bullish breakout at the 1,884 resistance level could extend buying until the next target level of 1,895 today. The idea is to sell below 1,872, and only to buy above 1,885. At the same time, choppy trading can be expected between the 1,872 and 1,885 levels today. Good luck!