Gold traded in the green during the Asian session on Wednesday. By the beginning of the European trading session, gold showed a result of + 0.2%.
The main factor behind the recovery in gold is the dynamics of the dollar index. Demand for the US currency has eased as investors await a more ambitious economic bailout program following Joe Biden's victory in the US presidential election.
As the epidemiological situation in the United States worsens, hopes for a larger stimulus package are growing. The leaders of the US Federal Reserve System said that active government assistance is needed for further recovery during this period. Typically, financial incentive programs devalue the dollar and support gold.
A number of US states, including California, are introducing stricter measures to combat the coronavirus in response to the rapidly growing number of cases. According to Johns Hopkins University, the United States currently suffers from 10.2 million cases, which is one-fifth of the world's total. On average, over the past 7 days, about 120 thousand new cases of infection have been registered in the United States.
Gold is also supported by the unstable domestic political situation in the United States. US President Donald Trump refuses to recognize the results of the presidential election, making unfounded allegations of falsification of election results and deception. This casts doubt on expectations of a smooth transfer of power and creates uncertainty in global markets, increasing investor interest in safe assets.
Today, investors will be watching the online forum “Central Banks in a Changing the World” hosted by the ECB. ECB President Christine Lagarde, Fed Chairman Jerome Powell and Bank of England Governor Andrew Bailey are expected to speak at the forum.
Buyers were able to keep the price above the level of 1867.00 yesterday, so today gold retains good chances for the continuation of the corrective movement towards the level of 1895.00.
The main scenario - growth to 1895.00 and a downward reversal.
An alternative scenario - a breakdown of support at 1867.00 and a fall below 1853.00.
The current fundamental outlook is neutral. We consider shorts from the levels 1895.00 and 1915.00.
Only from April 12, 2021, to May 14, 2021, Deposit Bonus 200% is available for all FortFS clients! Use the advantage to engage for the unique offer within a limited period: activate the deposit bonus and get up to 200% on the deposit amount on your trading account! How to get a Deposit Bonus of […]
FortFS wishes all traders a Happy Chinese New Year! Only from February 8 to March 12, 2021, we reduce spreads for the 4 most popular trading pairs. New values*: EURUSDf: 0.8 GBPUSDf: 0.9 USDJPYf: 1.0 XAUUSDf: 3.5 *These values are valid only for FLEX accounts Hurry up to take advantage of the offer! Learn more about spreads: https://www.fortfs.com/clients/specifications