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Original title: The path to fiscal stimulus has been rejected as soon as it was proposed! Gold finally returns to the descending channel and the bulls temporarily return to the blood.
FX168 Financial News (North America) News International spot gold continued its rally on Wednesday (December 2), peaking at US $ 1,832.52 per ounce, temporarily stabilizing above the 200-day moving average. At the same time, it has returned to the descending channel since the beginning of August. The bulls are expected to stage a more effective offensive. . Fed Chairman Powell’s recent concerns about the epidemic have brought positive support for gold, but the nearly trillion-dollar stimulus package proposed by senators from the two parties was once again rejected, once again suppressing the inflation risk. Therefore, under the long and short factors one after the other,Gold priceAt the moment, you may still be stuck in a limited range of crashes.
Some analysts believe that the trend in gold prices this week shows that traders expect gold to continue fluctuating in the near future, and there is room for ups and downs. Bullish news on the stimulus bill is reducing shorts and attracting buyers, while the vaccine hopes to keep the pressure on gold prices. Because the success of the vaccine can accelerate economic recovery and reduce the need for greater fiscal and monetary stimulus.
According to sources, a group of senators from both parties proposed an economic stimulus package of 908,000 million dollars to get out of the stalemate that lasted for several months. Without fiscal stimulus, the US economy risks slipping back into contraction. But neither Republican nor Democratic leaders endorsed the plan. President-elect Biden has so far supported the position of House Speaker Nancy Pelosi, and has pledged to promote a $ 2.4 trillion bill. At the same time, this proposal was rejected by McConnell, leader of the Senate Majority Party of the United States (Republican), who supported an aid package of approximately 500 billion dollars.
On the other hand, White House press secretary McNerney claimed that the $ 908 billion economic stimulus package proposed by the two parties in the Senate is not within the scope of the House’s fiscal stimulus negotiations. Blanca and the leaders of Congress.
In terms of economic data, the number of ADP jobs in the United States increased by 307,000 in November, with an expected value of 410,000, the previous value was revised from 365,000 to 404,000. The pace of job growth continues to slow. However, job growth across all industries and scales maintained positive growth in November. Analysts noted that actual data released in the ADP report was worse than expected, placing potential downside risks in Friday’s non-farm report. However, although the market also showed a slight aversion to risk, the general reaction to the report was still minimal.
From a technical perspective, on the daily chart, gold rose again above 1800 on Tuesday, reversing the bearish outlook below this level and opening room for the rebound correction. During the day, he is recovering even more. Initial resistance is in 1837, and additional resistance is in the 1850-1860 area. If the short-term downtrend, the 1820 and 1800 levels have been transformed into support.
(Daily spot gold chart, source: FX168)
However, some market analysts said that the 50% Fibonacci retracement level of 1763.5 appears to have halted the recent sell off of gold prices and has provided a “springboard” for this week’s rally. However, if this level is tested again, it remains to be seen if it can continue to stabilize, especially as the market moves out of the oversold range.
Panorama:
ANG Traders analysts said in a recent report that they expect that as the price of gold recovers from the key support level of around $ 1,770 (the 50 retracement level from March low to August all-time high), the Gold price will increase. It went up to $ 1,900. Although there is still room for gold prices to rise in the near future, ANG said the medium-term outlook does not look so bright and the biggest risk remains the dollar.
The analyst noted in the report: “The trend for gold and the US dollar is similar to 2000; the US dollar is at the lower end of its trading range, while gold is at the high point. medium term, the US dollar appreciates, as in 2000, perhaps depress gold in a few months until the economy improves and inflation expectations resume, causing the dollar to return to a bear market and that gold will return to a bull market. “
Edward Moya, Senior Market Analyst at OANDA, said: “We are seeing gold prices rebound to the $ 1,800 an ounce level, which is largely related to the weakening of the US dollar trade. gold has ended and we may see the US Congress take more steps to support the economy. “
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