Daily Brief, December 25 – Happy Christmas! A Quick Outlook on Gold!

Happy Christmas, traders. Today, the forex markets and banks will be closed in observance of Christmas Day. Let’s take a look at the outlook for GOLD. Prices for the precious metal,GOLD, closed at 1,879.17, after placing a high of 1,883.40, and a low of 1,869.42. GOLD prices rose on Thursday, but posted weekly losses after the twist regarding the US coronavirus stimulus package.

The rise in GOLD prices on Thursday, during the rather thin trading session, could be attributed to optimism over the US stimulus package, and the dollar-driven weakness, due to the successful Brexit deal between the EU and the UK. GOLD prices were supported by the fact that, despite the latest hurdle set by Donald Trump in the passing of the stimulus package, there is a huge likelihood that it will be passed relatively soon anyway. The Democrats and the Republicans finally reached a deal over the stimulus package, after months of negotiations on a $ 900 billion package. However, this package faced a hurdle once again, after President Donald Trump refused to sign it. Trump’s main objection was the measly $ 600 in personal coronavirus aid for needy Americans, approved by his own Republican Party.

This is a rare event, with the Democrats showing unity with the president, and supporting the demand for more payment in stimulus checks, while the Republicans are showing no signs of acceding this amount, despite Trump’s signature being required to prevent a federal government showdown. All this stimulus drama kept the US dollar under pressure, and the yellow metal gained on Thursday, as a result, rising for the second consecutive day. Meanwhile, the US dollar was also under pressure on Thursday, as Britain finally clinched a narrow Brexit trade deal with the European Union. As the US dollar is a rival currency to the Euro and the British Pound, the rising rival currencies weighed heavily on the greenback, ultimately supporting the GOLD prices.

PM Boris Johnson tweeted that the deal was done and the President of the European Commission, Ursula von der Leyen, said on Thursday that this was a long and winding road, but that they have a good trade deal to show for it. She also added that the UK remains a trusted partner of the EU. The text of the deal is yet to be released, but the deal itself has raised the risk sentiment in the market, weighing on the greenback and supporting the yellow metal.

Furthermore, the worries over the spread of a more transmissible coronavirus variant have led to a tightening of Britain’s restrictions, which has raised concerns over a post-pandemic economic recovery once again. These tensions also supported the safe-haven yellow metal on Thursday, during the thin trading session.

Daily Technical Levels
Support               Resistance
1,864.76              1,887.56
1,851.43              1,897.03
1,841.96              1,910.36
Pivot Point:       1,874.23

Team FXLeaders wishes you a Happy Christmas. Enjoy the rest of your day!