Gold up three days in a row the market is still bearish? Trump’s impeachment trial! Multiple factors such as the Bitcoin market and technical struggle are interwoven!

International spot gold continued its rally on Tuesday, hitting a high of $1,848.51 an ounce, on track for a third straight day, as optimism over fiscal stimulus raised inflation risks, giving bullion a boost. However, the latest outbreak and vaccine news suggest that the economic impact of the outbreak may gradually fade, which could dent safe-haven demand for gold, which is still at risk of resuming its downward trend in the longer term after a short-term rally.

As the market today and no heavy data, the trend of the dollar became one of the day’s focus. The dollar’s rally took a breather after a rally earlier this year. Dollar-denominated commodities such as gold and crude oil got a boost. Investors are eagerly awaiting progress on the U.S. stimulus bill. Democrats in Congress are continuing their push this week for President Joe Biden’s $1.9 trillion stimulus plan and are expected to pass it without Republican approval.

Meanwhile, former US president Donald Trump will face a second impeachment trial in the Senate today, this time on charges of “sedition”. While it is unlikely that Trump will eventually be convicted, a second impeachment has once again exposed the growing partisanship and social divisions in the US, and could have an impact on the future course of politics, sources said.

The cryptocurrency market was on a tear again today, as Bitcoin continued its rally, hitting a record high of $48,000 before falling back to nearly $45,000 at one point. Bitcoin surged yesterday after Tesla said in an official filing that it had invested $1.5 billion in the currency and was considering bitcoin as a way to pay for products. For now, the rally appears to be taking a breather.

Edward Moya, senior market analyst at trading platform OANDA, said Tesla’s announcement “is a catalyst to undermine the basic assumption of cryptocurrency haters, which was that there is no institutional interest behind the cryptocurrency. All eyes are on whether bitcoin will hit $50,000 in the near future, and it could go much further if the dollar continues to slide.”

Now investors are also watching to see if cryptocurrency gains will further attract safe-haven buying in the gold market, dampening the price.

, on the other hand, although in the infancy vaccine distribution, many countries will face the challenges and problems, more or less overall vaccination plan is still in steady progress, with the improvement of the various infrastructure and process improvements, and more manufacturers to launch a vaccine, believe that the market risk sentiment is expected to continue to improve, this is a threat to the gold market.

Technically, the underlying bullishness in financial markets appears to be the only thing keeping bulls from making new bets and keeping safe haven gold from further gains. Therefore, any follow-on positive move is more likely to meet strong resistance and hold around the 100-dma at around $1,870.

MarketPulse also noted that after returning to support around $1,830 / oz, gold needs to hold this level, ideally challenging the 200-day moving average of $1,853.80 / oz. Once that happens, beleaguered bulls can start to breathe a sigh of relief.

Aftermarket outlook:

David Meger, director of metals trading at High Ridge Futures, said investor interest in asset classes such as gold and silver, which act as stores of value, helped push prices higher after Tesla’s purchase of bitcoin.

Technically, another $100 drop-in gold prices in the short term is possible, said Bart Melek, head of global strategy at TD Securities. “Investors should be watching economic activity and the Fed’s response, as well as vaccine distribution and stimulus programs,” he said. “Gold can still go up and could hit $2,000 again in the next 12 months.”

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