Good morning traders,

The precious metal, GOLD, closed at 1,838.56, after placing a high of 1,848.51, and a low of 1,828.81. The GOLD prices extended their gains for the third consecutive session on Tuesday, amid the rising weakness in the US dollar, and increased US fiscal stimulus hopes. GOLD prices jumped 1%, to a one-week high on Tuesday, on the back of rising expectations that the $ 1.9 trillion US stimulus package will soon be delivered. The US lawmakers have a budget outline that could push US President Joe Biden’s proposed coronavirus relief package through Congress without the support of the Republicans, and this legislation is expected to be passed before March 15. These surging expectations have weighed on the US dollar, ultimately lending support to the prices for the yellow metal.

On Tuesday, the US dollar slipped to its lowest level in more than one week, making bullion cheaper for holders of other currencies. GOLD is considered a hedge against the inflation and currency debasement likely to result from widespread stimulus measures. According to US President Joe Biden, the size of the stimulus checks of $ 1,400 is non-negotiable, but some parts of the bill could be negotiated. He said that they had promised to deliver $ 1,400 to Americans, and they would get it. However, he also wanted stimulus checks to target specific people, which would exclude those in higher income groups.

After the bill has been approved, Biden’s plan would also fund programs that include federal unemployment insurance and financial assistance for state, local and tribal governments. Meanwhile, the weekly $ 300 federal unemployment checks that Congress approved in December, as part of the $ 900 billion coronavirus relief legislation, will expire in March. During his presidential campaign, Biden promised to reform the unemployment system, and he has also said that he will work with Congress to extend unemployment benefits that were authorized under the CARES Act, which were renewed in December, to last as long as the crisis. The president has proposed that he deliver $ 400 federal unemployment payments through September, to extend the benefits.

Aside from US stimulus, the US dollar was weak across the board on Tuesday, due to the slow delivery of coronavirus vaccinations in the US. So far, almost 30 million doses of coronavirus vaccine have been distributed in the US, which is far behind the 100 million doses Trump promised to distribute by the end of 2020. Biden set a goal of 100 million vaccine jabs in the first 100 days of his administration. His proposal will set aside about $ 160 billion for a national vaccination program. Biden has also requested that Congress deliver the finances needed to deal with the virus. He asked Congress to give him the stimulus package soon, as he is committed to delivering 100 million shots of the vaccine to Americans within his deadline of the first 100 days.

According to Biden’s proposed package, the child tax credit will also expand the current allowance that entitles families to claim $ 2,000 for children under the age of 17. If approved, the claims would rise to $ 3,600 per year for a young child, and up to $ 3,000 per year for an older child.

On the data front, at 16:00 GMT, the NFIB Small Business Index for January came in, showing a drop to 95.0, against the expected 96.6, which weighed on the greenback and supported the GOLD prices. At 20:00 GMT, the JOLTS Job Openings were released, showing a rise to 6.65M, against the expected 6.42M, which supported the US dollar, and capped any further gains in the yellow metal prices.

Daily Technical Levels
Support               Resistance
1,814.14               1,847.44
1,794.07              1,860.67
1,780.84             1,880.74
Pivot Point:       1,827.37

On Wednesday, trading in the precious metal GOLD continues to be bullish, in line with the previous forecast. It is trading at 1,840, and holding below an immediate resistance area of 1,844. On the lower side, the support remains at the 1,834 and 1,828 levels. A bullish breakout at 1,844 could extend the buying trend until the 1,852 mark. The bullish bias is likely to dominate over 1,828. Since this level is a bit far from the current market price, we should watch for a bearish bias below 1,844. Good luck!