International spot gold on Wednesday (October 21) short term sharp rise, intraday peak of $1931.01 / ounce although the gains have been reduced, but temporarily stabilized above the $1920 barrier, has broken through the bullish flag since the beginning of August, the most focus of the market day is the US stimulus bill progress. The deadline for House Speaker Nancy Pelosi has passed, and 13 days before the U.S. election, the Senate is still trying to confirm a Supreme Court justice. Critics argue that the stimulus bill will be a big one, and that the two sides have far too little time to reach an agreement. Still, as the dollar sold off across the board, this provided some momentum for gold to break. For now, until the next stimulus bill is in place, gold’s move is largely determined by the dollar index.
On fiscal-stimulus talks, White House Chief of Staff Mark Meadows said he plans to hold discussions with Senate Republicans and house Speaker Nancy Pelosi’s staff. There is still a lot of work to be done. The administration and House Democrats share the goal of reaching a COVID-19 assistance agreement within the next 48 hours. The biggest problem remains state and local aid. Separately, U.S. National Economic Adviser Tom Kudlow said the stimulus plan is moving forward and cannot speak for House Minority Leader McCarthy on the issue. He emphasized that things were moving in a favorable direction. No promises can be made about aid, but progress looks better.
On the general election front, polls continue to show democratic candidate Joe Biden as the favorite to win. In that case, ING said a collapse in the stimulus talks would not have a major negative impact on markets, as hopes for a stimulus bill after a Democratic victory would still be cushioned. For now, the fact that the chances of a bipartisan deal are increasing rather than decreasing may be enough to provide a floor for risky assets and currencies, the firm’s report said today.
Geopolitically, Japan opposes any move to raise tensions in the East and South China Seas, adding that its goal is not to create an “Asian version of NATO” to contain any particular country. Mr. Suga just returned from a four-day trip to Vietnam and Indonesia, his first overseas trip since taking office last month. The move is part of Japan’s efforts to strengthen ties with key Southeast Asian nations amid concerns about China’s growing assertiveness in the region.
Novel Coronavirus epidemic, the Sheffield district Government announced today that it has agreed to enter the novel Coronavirus epidemic restriction policy at the highest level. About 1.4 million people in the region will be quarantined starting Friday. Britain’s chief scientific adviser to Patrick valens (Patrick Vallance), said the latest vaccine may not completely prevent outbreaks, he thinks, although the positive development of vaccine field, but no one can eradicate will be coronavirus: “from any perspective, we can eradicate will quickly coronavirus’s ideas are not correct, because it will come back. Obviously, with better management, vaccination reduces the chance of infection and the severity of the disease… It could be more like the flu of the year, or it could be where we end up.”
On a technical note, gold has taken a dive from its three-month downtrend path on a daily chart and needs to close above downtrend resistance at $1913.50 to confirm a breakout. A sliding 50-day moving average (DMA) of $1,925 could challenge bulls’ confidence in the short term. If it continues to break above that level, it could hit the October 12 high of $1,933.30 before the $1,950 psychological level begins to act as a key resistance. Meanwhile, as long as gold stays above its 21-day average of $1,896, the
bullish bias will not change. The 100 – day average of $1,877 will be put to the test.
David Meger, head of metals trading at High Ridge Futures, said the gold market is taking a wait-and-see approach to the stimulus plan. It appears that republicans and Democrats are still at odds over the wording of some issues; Still, there is some hope that some sort of stimulus package can be agreed, which is clearly the most important factor for markets in the short term.
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. He added that there has been some modest short covering to keep gold above $1,900 an ounce, while political concerns over the US election have also continued to support gold’s rise.