Wednesday (January 13) sub-market intraday, the dollar index continued to fall, is now around 89.95; Spot gold continued to rise short – term, gold just broke through $1860 / ounce pass. Analysts said the fall in the dollar and U.S. bond yields had contributed to the rally, while expectations of more U.S. stimulus also helped support gold prices. In addition, political uncertainty in the U.S. also attracted some safe-haven buying. Investors will be watching the U.S. House of Representatives vote on Wednesday to impeach President Donald Trump.
Gold rose on Tuesday as the dollar and US Treasury yields retreated, with the prospect of higher inflation from more US fiscal stimulus providing further support. Spot gold settled Tuesday at $1,844.62 an ounce, up to $10.88, or 0.59 percent, from an intraday low of $1,837.04. Asian market intraday on Wednesday, spot gold continued to rise, gold prices as high as $1862.92 / ounce.
On Tuesday, the yield on the 10-year Treasury note fell to a session low of 1.146 per cent. The yield on the 10-year Treasury note rose as high as 1.177 per cent, the highest level since March last year.
U.S. President-elect Joe Biden says Americans need to do more to ease the economic strain of the coronavirus epidemic, and he will unveil a plan that will cost “trillions of dollars.”
Biden called for additional relief “now” after the latest jobs report on Friday showed the first decline in eight months. Biden said details of the stimulus plan would be released on Thursday.
Investors are betting that Biden will unveil further stimulus legislation when he takes office on January 20, MarketWatch reported. Since gold is often seen as a hedge against inflation and currency depreciation, a big stimulus package would boost demand for the precious metal.
Growing restrictions on social mobility around the world as the novel coronavirus continues its rampage could also help boost gold’s value, experts say.
Minh Trang, a senior currency trader at Silicon Valley Bank, said new blockades across Europe to combat a second wave of the new crown had heightened fears of a “double-dip recession” in the region.
Many analysts expect the dollar to fall as stimulus spending and the introduction of vaccines brighten the outlook for the global economy. Dollar weakness is positive for gold.
According to Economies.com, gold briefly fell below $1,855.45 an ounce in intraday trading on Tuesday and broke through a key support level of $1,838.10.
If gold stays above $1,855.45 an ounce, this will activate the double-dip pattern and provide positive impetus, which we are waiting for to push gold higher in the next few sessions, Economies.com notes. Economies.com expects the bullish trend scenario for gold to remain in place, with next targets at $1,81.00 and higher targets at $1,920.00.
Jim Wyckoff, senior analyst at Kitco Metals, said: “There is going to be a substantial stimulus package, which should be supportive of the gold market, not only to stimulate demand but also to give the impression that price inflation is a problem.”
“The macro picture remains positive for gold,” said Nicholas Frappell, global managing director at ABC Bullion. He added that gold remained vulnerable to dollar sentiment and yields in the short term.
The House of Representatives is expected to vote to impeach President Trump
Democrats in the US House of Representatives on Monday formally filed a motion to impeach President Donald Trump, accusing him of “sedition.” The House of Representatives on Monday released the final version of a bill to impeach US President Donald Trump under the title “Impeach President Donald John Trump for Felony and Misconduct.” The House of Representatives will vote on the independent bill on January 13.
“President Trump has gravely endangered the security of the United States and its institutions of government, threatened the integrity of democratic institutions, and interfered with the peaceful transition of power,” the draft articles of impeachment said. Trump has betrayed the public’s trust in the presidency.”
Steny Hoyer, the majority leader of the US House of Representatives, has announced that the chamber will meet on January 13 to vote on impeaching President Donald Trump.
The first impeachment against Trump took place in December 2019. At the time, the House of Representatives accused him of abuse of power and obstruction of Congress, and of trying to pressure Ukraine to smear his political rival Joe Biden, but the Senate voted to acquit him of both charges.
Under the U.S. Constitution, the president and other officials can be impeached and removed from office by Congress if they are found guilty of “treason, bribery, or other high crimes or misdemeanors” before the end of their terms.
Impeachment takes two steps: The House of Representatives initiates the impeachment process, and once the bill passes the House by a simple majority vote, the Senate must try and debate the charges. In order for impeachment to take effect, two-thirds of the senators present must approve the conviction.
On January 12, Liz Cheney, the No. 3 Republican in the House of Representatives, announced that she would vote to impeach Trump, denouncing violence in the United States and angrily accusing Trump of breaking his presidential oath. Liz Cheney is the second Republican House member to say she will vote to impeach Trump.
A group of Trump supporters protesting “election fraud” in Washington stormed the US Capitol on Saturday afternoon, forcing a halt to the process of a joint session of Congress certifying the final results of the election. Protesters confronted and clashed with military and police forces. At least five people died during the siege of the Capitol, including Capitol Police Officer Brian Sicknick.
On January 12, The New York Times reported that Senate Majority Leader Mitch McConnell would be “happy” to see U.S. President Donald Trump impeached after the House of Representatives opened a second impeachment trial against him.
Mr. McConnell has told colleagues that he believes President Trump has committed an impeachable crime, and that he is pleased that Democrats are moving to impeach him and that it will help Republicans move away from Mr. Trump and “Trumpism,” according to people familiar with his thinking on Tuesday.
In addition, a House Republican group has proposed a Trump condemnation resolution, which is tantamount to an impeachment measure. Three Republicans in Congress have already expressed support for impeaching Trump. Although the rebuke of Congress has no practical consequences, it can be extremely damaging to the president’s historical reputation.
Only two presidents in history have been formally censured by Congress — Andrew Jackson in 1834 and James Buchanan in 1860, before Jackson rescinded the condemnation. All other attempts at many other presidents, including famous ones like Abraham Lincoln, either failed or ended in condemnation in general statements that did not mention the president.
US President-elect Joe Biden said on Tuesday that he had long considered Trump “incompetent” and that it was up to Congress to decide whether to bring a second impeachment vote against him. Under the US constitution, if impeachment is successful, the Senate can bar Mr. Trump from holding public office again, meaning he cannot run for president again.