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Gold scores modest gains as dollar weakness provides tailwinds

#As of 3:20 PM EST gold futures basis, the most active #February 2021 #Comex contract, is fixed at $1883.40 after factoring in $3.00 (0.16%) of gains. #While on the surface this could be interpreted as traders bidding the precious metal higher, in the case of today’s action it was 100% due to a weak U.S. dollar. The U.S. dollar traded under pressure today down 4/10 of a percent and after factoring in today’s decline of 37 points is currently fixed at 89.905. #Simple math tells us that the 0.40% decline in the dollar is a little over twice the gain of 0.16% of gold futures today.

The same result in spot gold can be seen when viewing the KGX (#Kitco #Gold #Index) which shows that as of 3:41 PM EST spot gold was fixed at $1878.40, which is a net gain of $5.50 or +0.29%. #On closer inspection, we can see that traders contributed fractional selling pressure of about $1.20 per ounce. #It was dollar weakness that contributed $6.70, and resulted in today’s net gain of $5.50.

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#Much of today’s net changes in the financial markets were tied to confusion as #Senator #Majority #Leader #Mitch #McConnell blocked #Senator #Chuck #Schumer’s effort to increase the direct payments from the new round of fiscal stimulus from $600 to $2000. #Yesterday, the #House passed a related bill to address the amount of stimulus that would be allocated through direct payments as part of the fiscal stimulus package signed by #President #Trump on #Sunday.

#On technical basis support for gold pricing over the last three days has been defined by intraday lows that have come exceedingly close to the 50-day moving average which is currently fixed at $1870.90. #Below the 50-day moving average, the next level of support occurs at $1860 and is based upon a series of lows that occurred on #December 22 and #December 23.

#Resistance over the last five trading days has been defined by gold’s 100-day moving average which is currently fixed at $1904.50. #Over the last seven trading days gold has traded to an intraday high just at the 100-day moving average twice. #But on both attempts was unable to sustain a price above the 100-day moving average, let alone close above that price point.

#Another major factor that has put pressure on gold prices recently has been a strong risk-on market sentiment in which market participants favored U.S. equities for potential returns in lieu of a flight to the safe-haven allure of gold. There is then the question of #Bitcoin’s historical climb to all-time record pricing capturing some of the capital that would have flowed into gold. #Bitcoin futures (BTC F21) that trade on the #Chicago #Mercantile #Exchange gained $280 today and is currently fixed at $27,370 per coin. #This is the highest price futures ever recorded for a single coin. #Over the weekend #Bitcoin’s price gained over $3000 causing a gap from the close on #Friday and #Monday morning’s open.

#For more information on our service simply use this link.

#Wishing you as always, good trading and good health,

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#Disclaimer: The views expressed in this article are those of the author and may not reflect those of #Kitco #Metals #Inc. The author has made every effort to ensure accuracy of information provided; however, neither #Kitco #Metals #Inc. nor the author can guarantee such accuracy. #This article is strictly for informational purposes only. #It is not a solicitation to make any exchange in commodities, securities or other financial instruments. #Kitco #Metals #Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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##Gold #scores #modest #gains #dollar #weakness #tailwinds


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