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Gold continues to move up due to news of progress in US negotiations

On Wednesday, gold continued its upward movement in Asia. Investors are closely monitoring progress on stimulus measures in the US and awaiting the outcome of the two-day Federal Reserve meeting.

 

Over the last day of negotiations, Republicans and Democrats have made significant progress in negotiations on the formation of a new package of measures to help the economy. Representatives from both sides said the talks are close to completion. Speaker of the House of Representatives Nancy Pelosi said when leaving Congress that negotiations could be completed tomorrow.

 

This is positive news for gold, as the buildup of stimulus measures in the US will weaken the position of the dollar, with which gold has a strong inverse correlation.

 

The centerpiece of the day will be the last FOMC meeting this year. As a rule, at the last meeting of the FRS it gives forecasts regarding the dynamics of the movement of interest rates for the coming years. The Fed is expected to keep interest rates near zero for quite some time. Some investors are also looking forward to new signals regarding the timing and scope of the Fed's bond buying program. Most likely, the regulator will adhere to a softer rhetoric, which may further weaken the position of the dollar in the foreign exchange market, giving precious metals and other commodity assets a good opportunity to continue moving up.

 

Also in the economic calendar today, it is worth paying attention to the publication of preliminary data on the PMI of the manufacturing and service sectors in the US and the EU, as well as the publication of the report on retail sales in the US for November.

 

A local upward movement is developing on the chart. The price almost reached the previously mentioned target at the level of 1861.00. Perhaps today we will see a breakdown of this mark. In this case, quotes will continue to rise in the direction of 1870.00.

 

  • Resistance levels: 1861.00, 1870.00, 1884.00.

 

  • Support levels: 1824.00, 1810.00, 1780.00.

 

The main scenario is growth to 1870.00.

 

An alternative scenario is a downward reversal at the level of 1861.00.

 

The current fundamental outlook is neutral. We consider longs from the level of 1844.00.

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