During the Asian trading session the price of gold rose slightly, thanks to the continued weakening of the dollar, but the opportunities for growth are significantly limited by the positive sentiment of investors on the stock markets.
Asian indices hit new all-time highs today due to positive corporate reporting and general market optimism as the pandemic weakened amid vaccinations in many countries. Increased investor risk appetite is limiting demand for gold, which is a defensive asset.
The dynamics of the yield curve of the American Treasuries also continues to have a restraining effect on the precious metal. The yield on 10-year government bonds is held in the region of local maximums.
The focus of attention in the United States remains news related to the new economic aid program, which was presented at the beginning of the year by Joe Biden. The Democrats have launched the process of adopting this bill, but it can be significantly delayed. Democrats insist on the inclusion of a clause on raising the minimum wage at the federal level from $ 7.5 to $ 15 per hour. This is opposed by the Republicans and individual representatives of the Democrats, without whose support it will be problematic to pass the bill through the Senate.
Difficulties with the adoption of a new stimulus package in the US could have a negative impact on gold. First, the publication of data on the consumer price index for January. Second, a speech by Fed Chairman Jerome Powell at the New York Economic Club. The event will be held online.
On the chart, buyers have yet to cope with the resistance at 1844.50. The local trend for the instrument remains bearish, therefore, there is a high probability that the price can resume its downward movement from the current levels.
The main scenario is a decline from current levels in the direction of 1810.00.
An alternative scenario is a breakdown of resistance at 1844.50 and growth in the direction of 1866.50.
The current fundamental outlook is neutral. We consider shorts with moderate risks from the level of 1844.50.
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