Good morning, traders.

The yellow metal prices closed at 1725.45 after placing a high of 1725.70 and a low of 1705.90. GOLD extended its gains for the second consecutive session on Wednesday and reached its highest level seen in five days. The yellow metal posted small gains on Wednesday after a sharpest daily rise in two-months on the previous day. The US yields that eased on Tuesday regained their momentum on Wednesday and raised the opportunity cost for holding bullion while the US dollar also gained. However, both failed to reverse the course of yellow metal prices on the day.

On Wednesday, the US House of Representatives passed a $1.9 trillion coronavirus relief bill and sent one of the biggest relief plans in US history to President Joe Biden’s desk. The president is expected to sign the bill by Friday when Congress will formally send the bill to the White House. The bill passed the House without a Republican vote by a 220-211 as GOP argued that the job markets had recovered enough to warrant a little or no new stimulus plan. In the Senate, the bill was also approved by the Democrats on their own through the special reconciliation process.

The bill’s approval means more stimulus for the economy to fight against the coronavirus pandemic effect; however, it will hurt the local currency US dollar. The yellow metal prices inversely correlated to the US dollar’s value started to increase on Wednesday after the bill was passed as it raised the chances of weakness in the dollar.

On the data front, at 18:30 GMT, the Consumer Price Index from the US for February remained flat against the expectations of 0.4%. In February, the Core Consumer Price Index dropped to 0.1% against the expected 0.2% and weighed on the US dollar and added to further gains in gold prices. Meanwhile, on Wednesday, President Joe Biden directed his administration to order another 100 million doses of Johnson & Johnson’s coronavirus vaccine. His decision to stockpile the vaccine while the rest of the world was struggling with deep shortages was criticized. However, in defense, the US White House Secretary Jen Psaki said that the US wants to be oversupplied and over-prepared for every situation.

Biden’s priority was to ensure that Americans were vaccinated before considering distributing doses elsewhere. Furthermore, on the US & China front, the US State Department said on Wednesday that the US Secretary of State Antony Blinken would meet top Chinese officials on March 18 during a stop in Alaska. This will be the first high-level talks between countries over the issues with deep disagreements under Biden’s administration.

Daily Technical Levels
Support Resistance
1712.34 1732.14
1699.22 1738.82
1692.54 1751.94
Pivot Point: 1719.02

Gold is trading with a bullish bias at 1,714, exhibiting a bullish correction above the support level of 1,680. On the higher side, the bullish crossover of 1,712 can extend further buying trend until 1,734 level. The precious metal has recently crossed over the 20 & 50 periods EMA that is suggesting a bullish bias in gold. Today, buying can be seen until 1,730 if the price manages to hold over 1,712 level. The MACD and RSI are also supporting a buying trend today; therefore, the precious metal may head further higher until 1,730. Good luck!