Gold Finds Support Level After a Tough Week
Gold suffers a tough week trading to the downside as investors turn to US & European Equities with Covid-19 recovery more optimistic. Read on for a deeper understanding of market events.
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- Gold trades to the downside as focus shifts to other assets
- The path to a Covid-19 remedy becomes clearer
- The precious metal is currently trading modestly
Gold is trading to the downside this week as traders and investors have put their focus on more appealing assets prompted by the positive developments of a vaccine and the start of a smooth transition for the Biden administration.
The precious metal lost ground on Monday this week as investors piled on US and European equities as the road to a Covid-19 remedy seems more certain. Concurrently the path towards a transfer of power in the White House is clear now that the process has officially begun. In this light, Gold is down a bit over 4% for the week. The opening price on Monday was $1,876 but as Gold bugs failed to maintain the positive momentum, the price slipped to a low of $1,799 on Tuesday. Currently, the precious metal is trading modestly above $1,810 per ounce.
A Dormant Period For Gold From August to Date
Disappointing data coming from the US was not sufficient to spark some upside momentum in Gold buyers. On Wednesday, the US released 778K initial jobless claims, more than the expected 730K and the previous 748K. GDP QoQ (Q3) also came up short of expectations at 33.1% versus a forecast of 33.2%. As the economic conditions pose growth concerns, the US dollar reacted to the news by depreciating across the board, while Gold kept flat.
The current price levels of Gold indicate an increased dose of indecision in the market. Gold has been on a bull run for most of 2020 until August when the precious metal reached an all-time high followed by a consolidation that has been breached this week. Gold was dormant for the time between August and now as the price was moving sideways in the range of $1,950 and $1,850. There were four attempts by Gold bears to push it below the support line and the fifth proved successful as Monday’s price slipped below $1,850 for the first time since July 2020.
Today, market participants may see lowered volatility and rather shallow trading as the US celebrates Thanksgiving Day and the US markets will remain closed. Trading in the US will resume at the normal opening hour tomorrow but will close three hours earlier, at 13.00. Across the globe, there’s a light calendar with no significant economic events scheduled for Thursday
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