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Gold maintains upward movement due to weakening of USD

Gold grew on Wednesday morning in Asia amid continuing dollar depreciation. Investors are also digesting news that Senate Majority Leader Mitch McConnell has postponed a vote to increase incentive payments.

 

The US dollar remains the main benchmark for gold. While the dollar is declining, gold and many other commodity assets remain positive.

 

US Treasury Secretary Stephen Mnuchin said the distribution of the previously approved $ 600 stimulus began as early as Tuesday evening. The buildup of stimulus measures in the United States has a negative impact on the American currency. The dollar index is trading at its lowest levels in more than 2.5 years of trading.

 

In the coming days, investors will gradually turn their attention to news from Georgia, where the second round of elections is to take place on January 5, the results of which will determine who will control the Senate, Republicans or Democrats.

 

If the Democrats win, stimulus measures in the US could be increased, which will inevitably lead to further depreciation of the dollar. In this case, gold may continue to move upward even if the epidemiological situation in the world improves.

 

In the US economic calendar today, it is worth paying attention to the publication of data on pending sales in the real estate market.

 

On the chart, the situation practically did not change during the day. Buyers are holding the price above the 1867.00 level. The scenario with the growth of quotations towards the level of 1900.00 remains the priority.

 

  • Resistance levels: 1900.00,1915.00, 1935.00.

 

  • Support levels: 1867.00, 1850.00, 1824.00.

 

The main scenario is growth to 1900.00.

 

An alternative scenario is a breakdown of support at 1867.00 and a decline to 1850.00.

 

The current fundamental outlook is moderately positive. We are looking for buy signals in the range of 1867.00-1875.00

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