Gold Selloff Continues As Pound Sterling Ends the Month Firmer

Azeez Mustapha
30 November 2020 | Updated: 30 November 2020

Selling of gold resumes today, breaking the $1,800 mark and reaching $1,764.31 so far. Further decline is now expected as long as the resistance at $1,818.26 is held. The current decline from 2075.18 is seen as a correction of the entire uptrend from $1,160.17.

Sterling also strengthened slightly after UK Foreign Secretary Dominic Raab said the Brexit talks boil down to “only two main issues.” Dollar, Canadian dollar, and euro are weaker. However, the main movement can be found in gold, which finally penetrates the $1,800 handle.

A very busy week with data ahead. Important data to watch out for include ISM and US employment, eurozone CPI, Canadian GDP, and employment; Australia’s GDP; Chinese PMI, etc. The RBA rate decision and the Fed’s Beige Book are unlikely to generate many reactions.

There is no doubt that widespread vaccine distribution and a Brexit deal could support the pound. And on Monday it falls for the second day in a row. It bottomed out at $1,764 an ounce, its lowest level in five months, and then recovered but could not hold above $1,780.
On the Vaccine Front: Market Expectations
In general, the markets are relatively calm today in terms of trading at the end of the month. Stocks are in a quandary, indifferent to news of Moderna’s plans to get US and EU approval for its vaccine. In foreign exchange markets, sterling is currently the strongest pending news of Brexit trade talks.

Silvana Tenrejo, an MPC member of the Bank of England, welcomes news of the development of a coronavirus vaccine. However, there will be no economic recovery until vaccines are widely available. Households may delay spending until vaccinations due to health risks.

Besides, she noted that the progress in labor markets remains one of the most serious risks of deteriorating medium-term economic outlook for the Bank of England. At the last meeting, she voted in favor of further quantitative easing to protect against market disruptions.

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Azeez Mustapha

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.