Gold short term pull up! Gold is back near $1,945! England locks down city again, our politics hit hard today!

In the Asian session on Tuesday, the DOLLAR index continued to come under pressure, trading near 89.70. Spot gold rallied briefly, pushing gold back above the $1,940 mark and back towards $1,945 an ounce after surging nearly $45 yesterday. Markets are now focused on the upcoming runoff of two seats in the Georgia Senate, which will determine who controls the U.S. senate, and the outcome could have an impact on financial markets. In terms of the outbreak, England has declared its third lockdown as the number of confirmed cases of the COVID-19 virus soared. The increase in COVID-19 also supported gold prices.

Gold rose more than 2 per cent on Monday to its highest level in nearly two months, helped by a weaker us dollar. The dollar index fell to a 2-1/2-year low of 89.42 in intraday trading Monday. Spot gold closed at $1942.75 an ounce on Monday, up $44.47, or 2.34 percent, after touching $1944.36 an ounce, its highest level since November 9.

Gold confirmed a break above $1928.60 an ounce and is now above that level, reinforcing expectations of a continued bullish trend, according to Economies.com. Waiting for further gains in the coming trading sessions, gold’s next target is $1970.00 / oz. Maintaining gold prices above $1,928.60 an ounce is the first condition for a continued bullish scenario, Economies.com added.

Gold had its best annual performance in a decade in 2020. Gold hit a record above $2,050 an ounce last August. The main drivers of gold’s rise remain — fiscal stimulus, loose monetary policy, a weaker dollar, inflation fears and currency depreciation fears. A rise in confirmed COVID-19 cases and slower than expected vaccinations have also sustained the rally. Analysts say gold is on track to hit a record high in 2021.

The FX168 weekly financial Market Survey, released on Saturday, showed that analysts and traders were bullish on the outlook for gold in the New Year.

Peter Hug, head of global trade at Kitco Metals, said: “Gold will break its 2020 high. If inflation surges again, gold could well break through the $2,500 – $3,000 range until central banks begin to tighten monetary policy again. But it will take at least another year to tighten monetary policy.”

Markets are focused on Georgia’s runoff election

Georgia’s U.S. Senate runoff on Tuesday will be the key event of the week. The outcome will determine whether republicans or Democrats control the Senate, two seats Democrats need to win to take control of both chambers. The consequences for the United States will be profound. As usual, the polls are too close to be certain.

The U.S. Senate consists of two senators from each of the 50 states. After the 2020 election, including two independent senators who voted unanimously with Democrats, Democrats currently hold 48 seats in the Senate, while Republicans hold 50. In Georgia, two Senate seats are required by state law to be contested in a second round because no candidate has received a majority in the general election. President Donald Trump and Vice President Joe Biden traveled to Georgia to drum up support for their party’s candidate.

The crucial special election is drawing national attention. According to official figures in Georgia, about 3 million people have voted early so far, more than in the entire 2014 Senate election.

If Mr. Biden’s Democratic Party gains control of both houses of Congress, it will be easier for his administration to push for changes to the tax code and other policies to boost economic stimulus and infrastructure spending. Many investors see non-yield gold as a hedge against inflation and currency depreciation, which they fear could result from massive stimulus measures.

Avtar Sandu, senior commodity manager at Phillip Futures, said in a report that fiscal policy is likely to remain loose in the Democratic-controlled Senate, which will weigh on the dollar and favor precious metals.

Oanda analyst Edward Moya said in a research note that the final number of seats in the U.S. Senate controlled by both parties, as well as the bailout measures taken after Biden takes office, will be the next factor affecting gold prices.

Jeffrey Sica, founder of Circle Alternative Investments, said: “We are likely to see significant stimulus measures, which will lead to further dollar declines. This week’s Senate elections could turn out to be a major disruptive event, which could push gold higher.”

Commerzbank analyst Daniel Briesemann said gold was well supported on rising U.S. inflation expectations. He noted that recently, Democrats’ chances of winning both seats have increased, meaning they will have majorities in both the Senate and the House. That would make it easier for newly elected U.S. President Joe Biden to pursue his planned expansionary fiscal policy.

Hussein Sayed, chief market strategist at FXTM, said a weaker dollar at the start of the New Year boosted gold prices. If the Democrats win the Georgia Senate runoff, the dollar could fall further. “Tuesday’s Georgia Senate runoff is critical for the dollar as more stimulus measures are likely if Democrats win two senate seats, which only means more pain for the dollar,” Sayed said.

The FX168 weekly financial Market survey, released on Saturday, showed that analysts and traders were broadly 100 per cent bearish on the dollar’s outlook.

‘The pace of the dollar is very heavy,’ says Bart Wakabayashi, Tokyo branch manager for State Street Bank and Trust. ‘It’s going to stay that way until 2021.’

Analysts say the runoff for two Senate seats in Georgia, regardless of the outcome, will be a mixed blessing for stock investors. In a royal Bank of Canada survey of 75 institutional investors, 88 percent of respondents said they thought republicans would retain control of the Senate, while 56 percent said the outcome would be positive or very positive for the stock market.

When Congress counts and certifies the electoral College vote on January 6, U.S. Senator Ted Cruz says he will unite nearly a dozen Republican senators to once again challenge Democratic presidential candidate Joe Biden for victory.

England shuts down again

On January 4, local time, British Prime Minister Boris Johnson made a televised speech, announcing that England had imposed a third nationwide lockdown until at least mid-February. To control the more contagious variant, Johnson said, we would need to go into a national lockdown, which would be enough to contain the mutated virus. Novel coronavirus has spread rapidly in the UK, with medical experts saying the virus has spread 50 to 70 per cent faster than before.

Johnson announced that from January 5 to the middle of February, the highest level of strict control measures will be implemented throughout the UK, replacing the level 4, level 3 and level 2 control measures implemented in England respectively, so as to prevent the novel Coronavirus infection epidemic that is rapidly spreading. Under the new restrictions, people are required to stay at home except for reasons such as buying necessities, exercising or seeking medical assistance; Employees should stay at home as much as possible unless they cannot work from home. All restaurants will only be able to serve take-out food, and most schools will be closed.

Mr Johnson stressed that all Britons must stay at home unless they are given permission to travel for special reasons. He warned that the next few weeks would be the most difficult and that priority groups would get their first doses of the vaccine in the middle of next month. In a televised address, he also revealed that the British blockade would remain in place until at least mid-February, and that the situation was not optimistic.

The presence of the mutant strain B.1.1.7 confirmed in the UK prompted a number of countries to suspend flights to and from the UK. Johnson said in a statement that the UK’s chief medical officer had recommended that the country raise its alert level to phase 5, which means the NHS could be overwhelmed within 21 days if no action is taken. He said: “I fully understand the inconvenience and distress this change will cause, affecting millions of parents across the country. But the problem is that schools can become a vehicle for the virus to spread from family to family.”

According to the latest outbreak data from Johns Hopkins University, the UK has so far recorded more than 2.6 million confirmed COVID-19 cases and more than 75,000 deaths. The UK recorded 58,784 new cases on Monday local time and has now reported more than 50,000 new cases a day for seven consecutive days. Mr Johnson said the death toll in Britain had risen by 20 per cent in the past week and it was regrettable that figures would continue to climb, so now was the time to make efforts to contain the new strain. Before the national lockdown was announced, more than three-quarters of areas in Britain were subject to living restrictions.

It’s not just the United Kingdom that’s taking action. The Scottish leader Nicola Sturgeon has also announced new closures, and schools will remain closed. Wales has also closed most schools, and Stormont executives say schools in Northern Ireland will be extended to distance learning. Shortly after the Scottish announcement, Kier Starmer, the leader of the British Labour Party, tweeted that Mr. Johnson must impose a national lockdown within the next 24 hours, a call that eventually materialized. Britain, which is still running its own vaccination programme, has introduced Oxford-developed Astrazeneca in addition to buying Pfizer’s vaccine from the US.

Mr Johnson said: “The biggest difference between the UK and last year is that we are now launching a historic vaccination programme. Priority groups expected to receive two doses of COVID-19 vaccine in April will receive the first dose in mid-February, including residents of nursing homes and their carers, elderly groups over the age of 70, all front-line health and social workers and clinically vulnerable patients. If we are successful in vaccinating all of these populations, we will be able to protect large numbers of people from the virus. Ultimately, of course, this will enable us to lift many of the restrictions that we have endured for so long.”

A novel Coronavirus variant found in South Africa is more problematic than one found in the U.K., with both viruses now spreading rapidly, U.K. Health Secretary David Hancock said Monday. Mr Hancock told the BBC that the mutation found in South Africa was particularly worrying. “I am very concerned about the South African variant and that is why we are taking action to restrict all flights from South Africa. This is a very, very serious problem… And that’s more of a problem than the new British variant.”

Both countries are grappling with a surge in COVID-19 infections, largely due to mutations in the virus that make it more infectious.

Novel Coronavirus mutated in South Africa is more contagious and the efficacy of existing novel coronavirus vaccines remains in doubt, Oxford University medical Professor John Bell warned on Jan 3.

StoneX analyst Rhona O ‘Connell said the South African coronavirus variant could have an impact on precious metals prices. “A ban on South African flights would hit precious metals exports — including, of course, gold, platinum and palladium… These are all transported by air and most of them are on passenger flights.”

In addition, the Japanese government is considering temporarily banning all foreigners from entering the country, the Asahi Shimbun reported On Jan. 5. Japanese Prime Minister Yoshiaki Suga said on 4 January that due to the novel Coronavirus infection’s expanding scale, a declaration of emergency will be issued in the capital and the entry of foreigners will be completely restricted.

Last month, in view of the novel Coronavirus appearing in several countries, including Japan, the Government of Japan decided to suspend the approval of foreign entry from 28 December 2020 to the end of January 2021. But there are still 11 countries and regions where business travellers, international students and skills interns can continue to enter under certain conditions.

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