In the Asian session on Wednesday, the DOLLAR index continued to come under pressure, currently trading below 93. Spot gold prices accelerated in the short term, with prices just breaking through the $1,920 / oz barrier. Progress in us fiscal stimulus talks has been a strong support for gold prices. Gold has also been driven higher by safe-haven buying as the global coVID-19 epidemic has continued to develop, particularly with a surge in cases in Europe.
Gold prices rose for a second straight session Tuesday as a weak U.S. dollar helped push prices higher. Spot gold closed at $1,906.28 an ounce, up $2.39, or 0.13 percent.
Gold prices last traded above $1,920 an ounce, hitting a high of $1,920.31 an ounce in Sanya.
Chintan Karnani, chief market analyst at Insignia Consultants, said the dollar’s weakness was due to the strength of the euro against the dollar, which is favorable for dollar-denominated gold.
Karnani said there is some mild short covering in gold, keeping it above $1,900 an ounce, while political concerns about the U.S. election continue to support the rally.
“You have to factor in the fact that the dollar could be weaker for longer,” said Yousef Abbasi, global market strategist at StoneX.
The leading financial website Economies.com said gold prices were showing a clear upward trend and attacked a key resistance of $1911.00 an ounce. That suggests gold prices could rise further in the coming days.
Gold broke through resistance at $1,911.00 an ounce, according to Economies.com, confirming continued bullish sentiment, with the next target at $1,934.86 an ounce.
The United States has stimulated progress in the talks
White House Chief of Staff David Meadows said Tuesday that the Trump administration and Democrats made progress Tuesday in talks on the Novel Coronavirus stimulus program. The news was the main driver of the short-term rise in gold prices.
Meadows outlined the talks after a 45-minute conversation between House Speaker Nancy Pelosi and Treasury Secretary Mnuchin. He told CNBC that “good progress” had been made but there was “still a long way to go” to reach an agreement. Ms. Pelosi and Mr. Mnuchin plan to meet again on Wednesday.
Mr Meadows said there were still “difficult points” in stimulus talks between the White House and Ms Pelosi, but that Tuesday’s talks were productive and would continue.
“I think there is hope that these discussions will move forward again tomorrow or the day after,” Mr. Meadows said, adding that he hoped to “see some form of agreement by the end of the week.”
In a letter to House Democrats Tuesday night, Ms. Pelosi said the talks “provide more clarity and common ground that brings us closer to an agreement.” She said she and Mr. Mnuchin called on the House committee chairman to “resolve differences over funding levels and language.”
“I still hope that we can reach an agreement before the elections. It will be safer, bigger, better, and it will be retroactive, “she wrote.
Ms. Pelosi said Tuesday that the two sides had made progress in the talks. “Hopefully, by the end of the day, we all know where we are,” Pelosi told Bloomberg TELEVISION. But I’m optimistic.”
However, Senate Majority Leader Mitch McConnell told colleagues on Tuesday that he had warned the White House against reaching a large stimulus deal before the Nov. 3 election, the Washington Post reported, citing two people familiar with the matter.
McConnell suggested House Speaker Nancy Pelosi had not negotiated in good faith with Treasury Secretary Steven Mnuchin, and a deal could undermine the Senate’s plan to confirm Justice Barrett next week.
US President Donald Trump said on Oct 18 that he wanted “more Numbers” than House Speaker Nancy Pelosi had asked for. Earlier this month, House Democrats voted to pass a $2.2 trillion plan. Mr Trump’s comments suggest he will back a proposal bigger than the $1,800bn he proposed last week.
The Trump administration and Democratic leaders are struggling to agree on a new coVID-19 stimulus package before the November 3 presidential election.
Analysts said gold prices could rise further if the US stimulus bill is passed before the election. And if a stimulus package is not agreed before the US election, gold could risk falling again.
Kevin Grady, President of Phoenix Futures and Options, said gold price movements are directly related to the stimulus measures because gold is driven by inflation. ‘The more the government prints money, the more the dollar depreciates,’ he added.
In a gold survey released Friday by Kitco News, most Wall Street analysts and retail investors expect gold prices to move higher this week. Of the 16 analysts polled, 10 (63%) expect gold prices to rise; Two analysts (13 per cent) expect gold to fall this week; Four analysts (25%) said they expected prices to move sideways.
Experts said the long-term outlook for gold was expected to remain bullish under the mechanism of increased financial assistance.
Steve Dunn, head of exchange-traded products at Aberdeen Standard Investments, said in a telephone interview with Kitco News that investors probably shouldn’t expect any major aid legislation before the November 3 U.S. election. However, he added that a comprehensive package would eventually emerge, which would be good for gold.
Gold prices continue to be well supported, Dunn said, and it won’t take much to push prices above $2,000 by the end of the year. He added that the company expected gold to rise to $2,300 in 2021.
The US fiscal stimulus will trigger a rise in gold prices, which are expected to surge to $2,200 by the end of this year and $2,300 by early 2021, according to ANZ.
Covid-19 cases surge in Europe as global epidemic continues
The accelerated spread of the virus in Europe in recent days, as well as concerns about the outcome of the US election between democratic presidential candidate Joe Biden, a former vice President, and current President Donald Trump, have supported some recent demand for gold.
At present, the global coVID-19 epidemic is still accelerating, with a high number of new confirmed cases every day. In the past, the world averaged about 2 million new confirmed coVID-19 cases a week, with a peak of 390,000 new cases in a single day. The global cumulative number of cases rose from 30 million to 40 million in just 32 days.
Six countries — the United States, India, Brazil, Russia, Spain and Argentina — have more than 1 million confirmed cases, while three countries — The United States, Brazil and India — have more than 100,000 deaths.
World real-time statistics show that the cumulative number of confirmed cases of COVID-19 worldwide has exceeded 41.02 million, and the cumulative number of deaths has exceeded 1.129 million. The United States has the world’s highest cumulative number of confirmed CASES of COVID-19, with more than 8.52 million cases and more than 226,000 deaths.
As winter approaches in the northern Hemisphere, the number of new cases has increased in many countries, especially in Europe and the United States, where the number of new cases in a single week is nearly three times higher than at the first peak of the epidemic in March. Although the number of recently reported deaths in Europe is lower than the same period in March, hospital admissions are rising and intensive care beds in many cities will reach saturation in the coming weeks.
The Norwegian Health Agency confirmed the discovery in trondheim of a new variant of a novel Coronavirus with stronger viral transmission. About 1,000 people were quarantined in Trondheim last week after the outbreak, Norwegian state radio reported.
On October 19 local time, World Health Organization (WHO) Director-General Tedros Adhanom Ghebrev said the coVID-19 outbreak had entered a “worrying phase” as winter approaches in the northern hemisphere, with daily new cases rising sharply in Europe and North America. In this context, governments should make full use of the combination of proven measures to contain the spread of the virus and save lives.
“A novel Coronavirus and a flu virus usually prefer the cold to the hot, so a novel Coronavirus will spread more easily in autumn and winter in general,” said Michael Ren, WHO Assistant Director-General for National Health Coverage and Communicable and non-communicable diseases.
“The high level of uncertainty from the U.S. election and the Novel Coronavirus are keeping traders interested in gold,” Naeem Aslam, chief market analyst at AvaTrade, said in a note.
According to Commerzbank, gold is closely watching us stimulus talks, news of Brexit and an increase in coronavirus cases.
George Gero, managing director of RBC Wealth Management, said the ongoing earnings season, coupled with a new coVID-19 outbreak in Europe and a volatile presidential election in Bolivia, had prompted investors to flee to safe havens.