As of 2:50 p.m. EST, Spotgold is trading at $ 12.10 and is currently set at $ 1,827.40. On closer inspection, market participants are offering $ 17.60 lower spot gold today. However, the dollar weakness contributed to gains of $ 5.60, leading to a price drop of $ 12.10 today.
As of 2:50 p.m. EST Gold Futures, the most active Comex contract in February 2021 is based on $ 1,830.50 after today’s price drop of $ 13.10 (-0.72%) is taken into account. Currently, the dollar index is down roughly 3/10 percent and is fixed at 90.65, a net decrease of 0.274 points.
A combination of fundamental factors has fueled gold sales today. The fact that a Covid-19 vaccine has been approved by the FDA for emergency use and will be launched starting today to vaccinate the Tier 1 vaccine candidates. This includes medical workers and first aiders. After vaccination, these people’s vaccinations are transferred to those who are most vulnerable, namely elderly people in nursing homes or group accommodation for the elderly. There is one caveat; The vaccine will not be available to the public until Jan.st or 2nd Quarter of 2021.
The second main reason market participants have put pressure on gold trading today is because of growing concerns and doubts whether the Senate can agree on the second round of fiscal incentives to help the individuals and businesses hardest hit by the pandemic are. The Wall Street Journal has released reports that the House and Senate are on the verge of a compromise that could combine $ 160 billion in state and local aid and liability projections into a separate stimulus package to find a compromise and one before the end possible legislation to find the year.
Another major event this week that gold investors and traders will be focusing on is the upcoming FOMC meeting, which will be the last in 2020. However, it is expected that there will be no major policy changes as of this week’s FOMC meeting, which starts on Tuesday and ends on Wednesday. The only real concern according to Daily-FX is that the Fed may continue to keep the US dollar lower, leaving the greenback’s path of least resistance lower.
There is general optimism that a vaccine will be launched this week, and the government continues to negotiate a stimulus package that could be passed before the end of the year. However, so far there has been no agreement on the stimulus aid package and it will be many months before the vaccine is available to the public.
As these two realizations are starting to become clear about whether or not an agreement will be reached, an economic recovery plan will be adopted this year. This unsolved problem, along with the unknown amount of time before a vaccine is available to the public, creates great unknowns and uncertainties. It is this uncertainty that could quickly change market sentiment in gold that is currently bearish to bullish behavior.
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Gary S. Wagner