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Market News Will gold decline in the short term? Variant poison kills, how does gold go?

Will gold decline in the short term? Variant poison kills, how does gold go?

The US Congress is about to vote on the economic stimulus package, and the new restrictions triggered by the new virus in the UK have supported gold prices. However, some analysts pointed out that gold tends to decline in the short term.

LEO
2020-12-22
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Gold prices rose slightly on Tuesday. Spot gold rose 0.1% to US$1,878.72 per ounce. US gold futures rose 0.1% to $1,884.60.


SPDR Gold Trust, the world's largest gold-listed trading fund, said that its gold holdings increased by 0.2% to 1,169.86 tons on Monday and 1,167.82 tons last Friday.


Spot silver rose 0.2% to $26.23 per ounce. Spot platinum fell 0.5% to US$1,004.51, and spot palladium rose 0.5% to US$2,319.46.


Gold price has digested the news of US economic aid

The analysis believes that the British variant virus once again increased risk aversion, and investors once again realized the safety of the US dollar, so they decided to sell some gold positions. Because the fear of the new crown virus has caused a widespread sell-off of risky assets, and has prompted investors to switch to cash and withdraw from precious metals.


Oanda's senior market analyst Edward Moya said in a Monday research report that "Today's gold trend reminds traders of the panic selling in March."


The U.S. Congress has reached an agreement on an approximately US$900 billion COVID-19 rescue plan. The plan has been regarded as a bullish for recent gold buying because the plan supports expectations that government spending will increase and the U.S. dollar will depreciate. However, the market is concerned about the new crown virus. Concerns overshadow the impact of this news.


Fiscal expenditures depreciate the currency. Precious metals have always been regarded as a hedging tool to resist currency devaluation, especially gold. Recent trading views should be more favorable to gold. However, the Moya report writes, “Congress is preparing to launch a second stimulus package today, but Most of this has been priced by gold."

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