TEHRAN (Iran News) – Gold prices remain depressed near $1,870, down 0.10% intraday, during the early Monday morning in Asia. In doing so, the yellow metal fails to extend Friday’s bounce off $1,852.80 to near $1,880. The reason could be traced to the traders’ confusion amid mixed clues concerning the coronavirus (COVID-19) and vaccines as well as a lack of confirmation on the Brexit deal and the tussle between the US Fed and Treasury.
Although global vaccine producers are on their way to get regulatory approvals from the US and the UK, the surge in the covid numbers hasn’t faded yet, which in turn keeps the market players worries unless the cure to the pandemic rolls out. Also portraying the virus pessimism is the record high hospitalization rate in the US as well as the latest resurgence in Asian countries like Japan and India.
“Gold is consolidating Friday’s bounce from the long-held support at $1850, buoyed by a broadly weaker US dollar, courtesy of the covid vaccines-led optimism.”
Additionally, challenges to the soft Brexit, due to the disagreement over the key issues including fisheries, governance and competition rules, joins the doubt over the future of the Federal Reserve’s emergency lending program to weigh on risks. Furthermore, US President Donald Trump’s tiring efforts to stop the President-elect Joe Biden from reaching the White House also add to the market’s lack of clarity and sour the trading sentiment. “Covid data, uncertainty over Fed’s emergency program battle optimism concerning virus treatments, Brexit. Gold bounces off intraday low of $1,868.90, keeps pullback from the previous day’s top surrounding $1,880.”
Amid these catalysts, S&P 500 Futures wobble around the mid-3,500s with no clear direction. It should also be noted that markets in Japan are closed for the day and hence fewer moves are expected unless any surprises erupt from the risk front.
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Though, the preliminary readings of November month’s activity numbers for the leading economies, like the US and the UK, will be important to watch for the day.
Considering the bullish MACD signals, gold buyers are likely aiming at the one-week-old falling trend line and 10-day EMA joint, around $1,879-80, during the further recovery moves. However, the $1,900 round-figure can restrict the metal’s short-term upside. On the contrary, the $1852/48 support area, comprising the recent lows and May’s bottom, becomes the key support to watch if the bullion turns to the south.
- source : FXSTREET