Daily Brief, January 19 – Everything You Need to Know About Gold Today!
During Tuesday’s Asian trading session, the yellow metal prices succeeded in recovering from the one-and-a-half-month low and refreshed the intra-day high at around the $ 1,840 level, as the prevalent hopes for further stimulus measures, in an effort to boost economic recovery from the COVID-19 crisis, undermined the firmer US dollar and contributed to the gains in the yellow metal, as the price of gold is inversely related to the price of the USD. Meanwhile, the reason for the losses in the greenback could also be associated with the initial cautious sentiment ahead of the inauguration of the Biden governmen and the concerns about the coronavirus, which are having a further positive impact on the GOLD prices. On a different page, the faster-speading global COVID-19 strain and the possibility of more countries imposing tighter restrictions has lent some additional support to the safe-haven yellow metal. In contrast to this, upbeat Chinese data released yesterday, and hopes that US President-elect Joe Biden and his officials will roll out the promised $ 1.9 trillion coronavirus aid package, boosted the market trading sentiment. This has become a key factor that is keeping a lid on any additional gains in gold. At the time of writing, the yellow metal prices were trading at 1,839.50, and consolidating in the range between 1,836.17 and 1,843.68. Moving on, the traders seem cautious about placing any strong positions, amid holidays in the US markets and a light calendar elsewhere.
The market trading sentiment has succeeded in stopping its negative performance of the previous day, and it is starting to flash green on the day, as the positive US stocks futures figures tend to highlight the risk-on sentiment. Behind this positive performance was the optimism surrounding the coronavirus (COVID-19) aid package. President-elect Joe Biden and company will inject the promised $ 1.9 trillion covid aid package without any trouble. The investors are waiting for the comments on US stimulus measures by Secretary of the Treasury nominee Janet Yellen. Biden’s optimistic plan needs Senate’s approval, and that’s where his team member Janet Yellen will play a big role; the notes she has prepared for today’s speech in the Senate suggest that she is in favor of the huge relief package, considering the record-low interest rates.
The latest upbeat Chinese data from across the ocean also played a major role in underpinning the market trading sentiment. The positive tone of the market sentiment favors the gold buyers, due to the weakness of the US dollar. Furthermore, Italian Prime Minister Giuseppe Conte has won the chamber of deputies’ confidence vote by 321-259, as expected, but it remains to be seen whether her will win in the Senate and retain his leadership of the country. Conte will need over 321 votes in order to recover from the shock of former ally Matteo Renzi’s departure.
As a result of the risk-on mood, the broad-based US dollar failed to gain any positive traction, remaining bearish on the day. Meanwhile, the losses in the US dollar were further bolstered by the cautious sentiment ahead of the inauguration of the Biden government and the ongoing worries about the coronavirus. The losses in the US dollar are seen as a key factor that is helping the gold prices to stay bid, as the price of gold is inversely related to the price of the greenback. By 11:03 PM ET (4:03 AM GMT), the US Dollar Index, which tracks the greenback against a bucket of other currencies, had dropped by 0.11%, to 90.653.
Elsewhere, the reason for the upticks in the GOLD prices could also be attributed to the long-lasting concerns over the coronavirus (COVID-19) and the ongoing tussles between the US and China. As per the latest report, the new coronavirus strains are spreading faster in the US and the UK, which in turn is resulting in fresh restrictions on activities. Elsewhere, Asia and the Pacific nations are taking precautionary measures after finding a few cases of COVID-19, as mass vaccination efforts start.
Looking forward, market traders will keep their eyes on key speeches by Yellen, Biden and the ECB. Meanwhile, the COVID updates and any additional stimulus information that could decorate the calendar ahead could add to the upside momentum of the commodity. In addition to this, the typical risks catalysts, like geopolitics and the virus woes, will continue to affect the markets.
S1 1,10.37
S2 1,823
S3 1,830.31
Pivot Point 1,835.62
R1 1,842.94
R2 1,848.25
R3 1,860.87
GOLD is trading sideways around the 1,837 mark, after crossing above an immediate resistance level of 1,837, which is working as support now. On the higher side, the precious metal may find resistance at 1,846, and a bullish breakout at the 1,846 level could extend the buying trend, which might lead the GOLD price towards the next target area of 1,855. At the same time, the support may remain at the 1,837 level. The RSI and MACD suggest chances of a continued buying trend today. Good luck!
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