Gold Price Declines As Incoming US Administration Plans $2 Trillion Stimulus

Gold Price Declines As Incoming US Administration Plans $2 Trillion Stimulus

Despite the decline in US yields, the US dollar still appreciated. That was enough for gold to drop 0.45% to $1,845.00 an ounce. Traders are also nervous: today, gold fell another 0.40% to $1,838.00 an ounce.

The new US administration, led by President-elect Joe Biden, is expected to unveil a massive Covid-19 relief package worth about $2 trillion on Friday, citing two people who were briefed on the discussions.

His advisers recently told allies in Congress that they expect a target price of $2 trillion, up to $700 billion from the $1.3 trillion packages that Schumer requested at auction in New York late Wednesday.

The fact that gold fell is an ominous development, even though the yield on US 10-year bonds also declined. If the yield on US 10-year bonds reverses course and begins to rise again, reducing the negative pass-through in real yields, gold could experience another sustained selling spurt. A US stimulus package of $1.5-2.0 trillion may be enough to tip the scales.
Further Rally on Gold Not Ruled Out
Investors reduced their open interest positions by almost 4 thousand contracts on the previous day, changing the previous construction according to preliminary data from CME Group. On the other hand, the volumes changed two drops in a row and increased by almost 4.9 thousand contracts.

The negative behavior of gold prices on the previous day was caused by a reduction in open interest, which robbed some of the forces of a deeper pullback and made possible further consolidation shortly.

In the above report, gold quickly dropped by about $20 to $1,832 as the sell-off in US Treasuries triggered a 2% jump in 10-year Treasury yields, triggering a new rebound in the US dollar index.

The yellow metal is currently gaining momentum as market participants await Powell’s Fed speech. The recent rise in US bond yields and speculation about what the central bank will do in the next meeting make Powell’s words more interesting.

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Gold Price Analysis — January 13

Gold Price Analysis — January 13

Gold (XAU/USD) traded on a directionless bias through the early European session, as it remained range-bound. The yellow metal was last spotted trading around the $1855 level.

The prevailing drawdown in the US Treasury bond yields kept the pressure on the US dollar (DXY), which extended support to the dollar-denominated commodity. The US bond yields retreated from a recent bull run overnight. Also, the Fed announced that its monetary policy will remain accommodative, which provided extra support to the non-yielding metal.

The recent Democratic win at the US Senate runoff in Georgia bolstered investors’ expectation over larger stimulus measures from the Biden administration, which triggered a selloff in the 10-year US government bond yield yesterday.

Nonetheless, these bolstering factors failed to provide meaningful gains for gold, considering the underlying risk mood across markets. The rollout of vaccines for the highly-contagious COVID-19 also helped bolster investors’ sentiment for a strong global economic recovery.

Moving on, market participants will be looking at the US economic docket today—which features the release of the latest consumer inflation figures—for clues. This data, coupled with the US bond yields, will influence the USD price dynamics today.

XAUUSD – Hourly Chart

Gold (XAU) Value Forecast — January 13

XAU/USD Major Bias: Sideways

Supply Levels: $1860, $1880, and $1893

Demand Levels: $1850, $1838, and $1818

Gold bulls continue to put up a good fight against bears, who are relentlessly trying to take price lower. The commodity has been range-bound between the $1860 pivot point to the $1843 support.

Meanwhile, the commodity is steadily trading in an upward pattern as it aims to get back into the $1893 – $1860 pivot zone. In the meantime, the $1850 support will likely continue to bolster the commodity against any sustained decline.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Gold Price Analysis — January 11

Gold Price Analysis — January 11

Gold (XAU/USD) traded with on a bullish momentum in the early European session on Monday, as it rebounded by over $35 from a low level not seen since early December last year.

The intraday rebound was triggered by the risk-averse mood sweeping across markets, which tends to bolster demand for the precious metal.

Growing concerns over the worsening state of Coronavirus numbers globally and the imposition of renewed lockdown measures across Europe and China dampened investors’ risk mood. This risk-off flight was evident in the equity markets.

Nonetheless, the bullish tone surrounding the US dollar (DXY) could cap any further gains for the dollar-denominated in the meantime. The greenback got adequate support from the prevailing rally in the US Treasury bond yields.

Meanwhile, investors have been slowly pricing-in the possibility of a more pronounced US fiscal spending in 2021, including direct stimulus payments and hefty infrastructure spending. The downbeat NFP reports on Friday further strengthened this speculation and boosted the US Treasury bond yields to a 10-month high.

That said, it is advisable to avoid taking aggressive bets at the moment and wait for a sustained directional move. The market will be dictated by the broader market risk sentiment and the USD price dynamics, considering the absence of any market-moving economic releases today.

XAUUSD – Hourly Chart

Gold (XAU) Value Forecast — January 11

XAU/USD Major Bias: Bullish

Supply Levels: $1859, $1880, and $1893

Demand Levels: $1842, $1823, and $1808

Following the devastating decline from last week, gold is now picking up the pieces and is making meaningful strides to get back into the $1859 – $1893 pivot zone and subsequently into the ascending channel.

That said, we expect the precious metal to stage a steady recovery near the $1880 in the coming hours and days.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Gold retests key level

Gold retests key level

Fundamentally speaking I like the upside in Gold A LOT. With this Blue Wave coming in the US (Big Democratic Control) we are going to see a lot more social based bills passed and more liquidity injection, a.k.a QE. This will kick the US Dollar down and metals, all safe heavens like the Yen actually, up.

So the latest -7.30% move to the downside is nothing but a great buy opportunity in my opinion.

Bear in mind that even though we are hitting and rejecting a massive level this trade idea remains risky because it’s a dip buy and not a reversal pattern breakout.

The first key level to the upside is the 1873 level. If this level holds buys would no longer be in play but if it fails and buyers swipe all the sell orders placed there a retest of the previous highs around 1960 is very much real.

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Gold retests key level on NFP miss

Gold retests key level on NFP miss

Last month the US substracted 140K jobs on the worst Non-Farm Payrolls since April.

Gold failed to climb higher but is now retesting the 1860 level which is also the 2.618 of the last pullback. This finished the ABC pullback of the previous bullish move.

This long signal is risky since we are facing an non-validated reversal (no pattern) but with hw fast this market moves in NFP Friday the R of the setups justifies the risk.

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Gold Price Analysis — January 6

Gold Price Analysis — January 6

Gold (XAU/USD) traded on a sideways pattern in the early European session on Tuesday, as the commodity struggled to capitalize on its bullish momentum from the previous two sessions.

It appears that the market has begun pricing in the possibility of a Democratic win in the crucial US Senate runoff elections in Georgia. The final election results will not be out until the end of today, albeit with the increasing likelihood of a Democrat-controlled Senate.

A Democrat-controlled senate will give President Joe Biden easier access to his preferred economic policies, including additional—and possibly larger—stimulus measures and infrastructure projects. This possibility has caused the US dollar (DXY) to come under immense pressure, thereby extending further support to the dollar-denominated commodity. Also, the prospects of stricter regulations for large tech companies—and the industry as a whole—caused the Nasdaq futures to slide by nearly 2%, which bolstered gold even further.

Meanwhile, the 10-year US Treasury yield rose beyond 1% for the first time since March on the expectations of larger government borrowing. This rise is probably the only factor capping gains for the non-yielding metal. Also, investors are hesitant to place any aggressive bets ahead of the FOMC minutes scheduled for later today.

In the meantime, the greenback’s price dynamics and the broader market risk sentiment will provide trading opportunities for the precious metal.

XAUUSD – 4-Hour Chart

Gold (XAU) Value Forecast — January 6

XAU/USD Major Bias: Bearish

Supply Levels: $1950, $1965, and $1980

Demand Levels: $1920, $1907, and $1900

At press time, gold appears to be stalling near the top of our ascending channel as bullish momentum dwindles. That said, we expect a sharp price correction in the near-term to the lower-$1900 area.

Our 4-hour MACD indicator pronounces the impending correction even better, as the commodity retreats from overbought territories.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Gold retests MAJOR resistance level

Gold retests MAJOR resistance level

Gold has rallied to a massive level which was where seller jumped in and Gold dipped 6% and 10% respectively after (Sept 15 & Nov 09 2020).

Technically speaking this level confluences with the retest of the current structure, major short term bullish target and massive bearish divergence.

This short idea is risky and should be in play only if the reversal pattern breaks. Should this happen we could see Gold retest the previous broken level and the bottom of the structure with momentum players jumping in.

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Gold Price Analysis — January 4

Gold Price Analysis — January 4

Near-zero interest rates and a bolstered economic outlook amid improving COVID-19 vaccine rollout has caused the US dollar (DXY) to slide even further, boosting demand for gold (XAU/USD).

China’s Renminbi grew by about 1% in the early Asain session on Monday, as the USD/CNY falls below a 30-month low for the first time. The Chinese Renminbi gained against the dollar despite dwindling manufacturing activities. The Caixin/Markit Manufacturing PMI report for December fell below speculators’ expectations. Nonetheless, economic activities in the second-largest economy are in full swing as other developed economies continue to combat the spread of the virus with renewed lockdown restrictions.

In other news, Georgia’s Senate runoff elections, scheduled to hold on Tuesday, will be crucial for the dollar, considering that a Democrat win of both senate seats could trigger additional stimulus for US citizens. That said, easing programs by the US government always has negative impacts on the greenback.

Meanwhile, gold has begun the new year on a very bullish note. At press time, the precious metal is trading up at +1.8%, with a daily—and YTD—high of $1936. Several factors will likely keep providing adequate support for the yellow metal in the coming weeks and months. Further lockdown restrictions across the globe as Covid cases continue to rise and additional easing measures by central banks are some of the bolstering factors for gold in the near-term.

That said, many speculators are now placing their expectations on a break of the highly-coveted $2000 price tag in the coming months.

XAUUSD – Hourly Chart

Gold (XAU) Value Forecast — January 4

XAU/USD Major Bias: Bullish

Supply Levels: $1940, $1950, and $1965

Demand Levels: $1920, $1907, and $1900

The XAU/USD is currently trading in a bullish momentum up our hourly channel, following a clean bounce off the $1885 level as previously predicted. We expect the commodity to continue upwards towards the $1950, at least, as $2000 is expected to come into play soon.

However, the precious metal has ventured into overbought conditions, making a modest pullback to the lower-$1900 in the near-term likely.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Scaling in on Gold Longs

Scaling in on Gold Longs

After old hit and rejected 1900 it pulled back to retest 1870 and has been trading inside of a 150 pip range for the past 2 sessions.

We are still trading inside of the mid term bullish structure and should price break with today and yesterday’s highs a retest of the 1900-1905 zone would be in play.

The DXY continues to make lower lows which is bullish for Gold in the short term.

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Gold Price Analysis — December 30

Gold Price Analysis — December 30

Gold (XAU/USD) continued its sideways journey in the early European session on Wednesday, as the commodity is locked in a battle with the $1880 price point.

The yellow metal could not capitalize on last week’s goodish bounce to the $1900 psychological figure amid the flourishing upbeat market risk mood. The global sentiment got more bolstering from the recent announcement that UK regulators have approved the use of AstraZeneca/Oxford Coronavirus vaccine.

Additionally, hopes for another round of US financial aid and growing expectations of a strong global economic recovery in 2021 lent further to the prevailing risk-on appetite. This risk sentiment was seen as one of the crucial factors undermining demand for traditional safe-haven assets, including gold.

Meanwhile, the ongoing flight from the US dollar (DXY) offered some support to the dollar-denominated commodity and has forestalled any sharp decline. The greenback came under renewed pressure after Senate Majority Leader Mitch McConnell blocked efforts to bring up COVID-19 relief payments to $2,000 from the initially proposed $600.

Market participants will now be looking at the US economic data today–which features the Goods Trade Balance, Chicago PMI, and Pending Home Sales–for trading clues. This data release, coupled with the broader market risk sentiment, could influence the dollar’s price dynamics, which would inadvertently affect the XAU/USD.

XAUUSD – 4-Hour Chart

Gold (XAU) Value Forecast — December 30

XAU/USD Major Bias: Sideways

Supply Levels: $1893, $1900, and $1907

Demand Levels: $1876, $1865, and $1859

Gold remains solidly in consolidation mode between the $1893 – $1859 pivot zones. However, the commodity appears to also be consistent with the prevailing ascending channel, as it continues to record higher lows. This factor is a good indication that bulls are still in control, albeit with little action.

That said, we expect the precious metal to continue proceeding with our upward-facing channel in the coming hours and days. A fall from this level could get repelled by the $1859 pivot point and, subsequently, by the $1850 support.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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