International spot gold (Dec. 29) tight trading range, the highest hit $1883.48 an ounce, further upward resistance is still large, although the trump aid bill had been signed last week, but judging from the reaction of the market, the bill for the risk of inflation is relatively limited promotion effect, at the same time, it is a certain risk aversion, gold prices temporarily difficult to organize effective offensive. However, given the overall epidemic and the uncertainty of the economic recovery, the gold market remains a bearish trend.
Days before he signed the bill, Mr. Trump demanded a direct payment of $2,000. The Democratic-controlled U.S. House of Representatives voted 275-134 On Monday to increase a second round of direct federal funding to $2,000, leaving the decision to the Republican-controlled Senate. It remains unclear whether the bill will pass the Senate. Some Republican senators say $2,000 is too much and will cost too much. But at least By signing the bill, Mr. Trump has temporarily brought some relief and avoided a federal government shutdown, calming market optimism.
Against this backdrop, the DOLLAR index fell further, falling again below the 90 mark. Shorting the dollar has been a popular trade of late, and Reuters calculations based on data released by the Commodity Futures Trading Commission on Monday suggest it could continue to do so. Short dollar positions rose to $26.6 billion in the week ended Dec. 21, their highest level in three months. A weaker dollar provides some support for dollar-denominated assets such as gold.
Meanwhile, drugmaker AstraZeneca’s COVID-19 vaccine is expected to be licensed by the UK drug regulator this week, adding a ray of optimism to the grim situation in the region. So far, however, many Europeans have expressed doubts about the speed of testing and approval, indicating a reluctance to vaccinate. Polls show 56 per cent of The French population would not be willing to have the vaccine, while only 40 per cent of Poles would co-operate with the government.
For now, the tug between COVID-19 and vaccines will continue to drive gold prices, and the speed of vaccine distribution and vaccination will also affect gold’s upside. What’s more, the post-Brexit situation is also key to driving risk signals.
On a technical note, FXStreet analyst Anil Panchal said gold will still target $1,900 an ounce unless the day closes below its uptrend level of $1,878 since November 30. In terms of key points, Panchal expects $1,861.82, $1,850.06 and $1,830.79 to provide intraday support. $1,892.85, $1,912.12 and $1,923.88 would be intraday resistance.
In addition, there were 1995.827 tonnes of gold held in eight of the world’s biggest ETFs as of December 28, up 2.334 tonnes from the previous trading day, according to data from gold information website www.24K99.com, which monitors the world’s eight major gold ETFs.
Saxo Bank analyst Ole Hansen said, “Gold is trading well in technology, backed by a weaker dollar, and the weaker dollar is backed by the possibility that U.S. consumers will get bigger checks. We will go into 2021 with some nervousness as the stock market is at a higher level and the outlook for additional stimulus and vaccines begins to improve the economic outlook… But overall, that has not reduced investor appetite for safe-haven metals.”
Hitesh Jain, chief economist at Yes Securities, said news of an economic recovery next year would drive the broader market higher, but expansionary fiscal policy and loose monetary policy would keep gold prices around current levels.