Starting at 14:50 EST spot gold is trading lower by USD 12.10 and is currently set at USD 1827.40. On closer inspection, market participants bid gold down $ 17.60 today. However, the weakness of the dollar contributed gains of $ 5.60, resulting in today’s price decline of $ 12.10.
Starting at 2:50 p.m., the EST gold futures base, the most active Comex contract in February 2021 is set at $ 1830.50, after considering today’s price drop of $ 13.10 (-0.72% ). Currently, the dollar index is declining by about 3/10 percent and is set at 90.65, which is a net decline of -0.274 points.
A combination of key factors fueled the sale of gold today. The fact that a Covid-19 vaccine has been granted emergency use by the FDA and, as of today, has begun to be launched for the vaccination of level 1 candidates. This includes medical workers and first responders. After vaccinating these people, vaccinations will move to the most sensitive, which are the elderly in nursing homes or group homes for the elderly. There is a warning; the vaccine will not be available to the general public until 1St. or 2when quarter of 2021.
The second main reason why market participants saw the gold trade under pressure today is growing concerns and doubts about whether or not the Senate will be able to agree on a second round of fiscal incentives to help people. and the companies most affected by the pandemic. Reports emerged from the Wall Street Journal that the House and Senate are close to a compromise that could provide $ 160 billion in state aid and local projections in a separate stimulus package, in an attempt to reach a compromise and a possible legislation before the end of the year.
Another important event this week that investors and gold traders will focus on is the upcoming FOMC meeting, which is the last to take place in 2020. Although no major policy changes are expected at this week’s FOMC meeting, which starts on Tuesday and ends on Wednesday. The only real concern, according to the Daily-FX, is that “the Fed could continue to talk about the lower US dollar, leaving the path of least resistance to the green dollar.”
There is general optimism that a vaccine will be launched this week, and the government continues to negotiate a stimulus aid package that could be adopted before the end of the year. However, to date, there is no agreement on the stimulus aid package, and the vaccine will take many months before it is available to the general public.
As these two achievements begin to gain some clarity as to whether or not an agreement will be reached and a stimulus bill will be passed this year. This unresolved issue, along with the unknown time before the vaccine became readily available to the public, creates some unknowns and uncertainties. This uncertainty could quickly change the sentiment of the gold market, which is currently a rising behavior.
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Gary S. Wagner