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Gold is consolidating in a narrow range

Gold is showing moderate gains on Friday. The market continues to act on the statements of the Chairman of the Federal Reserve System Jerome Powell about the intention to preserve the soft monetary policy and the program of new measures to stimulate the economy presented by Joe Biden.

 

This morning, Biden unveiled his "America's Bailout Plan," which includes new spending of $ 1.9 trillion. About 1 trillion of these funds will be directed to direct payments to households, an increase in unemployment benefits.

 

Yesterday at an online symposium at Princeton University, Fed Chairman Jerome Powell said that the situation in the economy remains difficult, so the regulator does not intend to tighten monetary policy in the near future. Interest rates will remain at current levels until inflation and labor market targets are met. Scaling down the asset repurchase program is also not on the agenda.

 

The Fed's soft policy and new fiscal stimulus measures create good preconditions for further strengthening of gold in the medium and long term. The dynamics of the US Treasury yield curve continues to exert a short-term restraining effect on the precious metal.

 

The economic calendar today will focus on the US retail sales report for December.

 

On the chart, the situation has practically not changed over the past day. Trades are still constrained in the horizontal channel of 1824.00-1862.00. Today we are waiting for the development of a moderate upward movement to the upper border of the flat trend at 1862.00.

 

  • Resistance levels: 1862.00, 1890.00, 1915.00.

 

  • Support levels: 1824.00, 1810.00, 1780.00.

 

The main scenario is growth to 1862.00.

 

An alternative scenario is a decline to 1824.00 from the current levels.

 

The current fundamental outlook is neutral. We consider longs on a pullback to 1837.00.

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