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Original caption: Gold suddenly “flying down” at the 1840 mark of US $ 30, and the fiscal stimulus plan is tossed around, and the bulls wait for the Fed to redeem it.
FX168 Financial News (North America) News Gold priceOn Wednesday (December 9), it fell almost 1%, a drop from the two-week high set on the previous trading day. The reason was that optimism about the development of new corona pneumonia vaccines led investors to choose riskier assets such as stocks.
In the US market, in early trading, spot gold fell almost 1.6% to a daily low of $ 1,840.66 an ounce, $ 30 less than the daily high.
(15 Minute Gold Spot Chart, Source: FX168)
On Tuesday, the price of gold reached its highest level since Nov. 23, at $ 1,875.23 an ounce.
Deutsche Commerzbank analyst Daniel Briesemann said: “The increased appetite for risk seems to have the upper hand again, together with the news about vaccines this seems to put pressure on gold prices.”
On Tuesday, the latest attempt by the United States to agree on a new fiscal support package supported gold to hedge against potential inflation risks, but Wednesday’s news served mainly as another trigger for risk sentiment.
Regarding the economic stimulus, US Treasury Secretary Mnuchin proposed a $ 916 billion economic stimulus plan to House Speaker Pelosi on Tuesday night. At the same time, lawmakers tried to break the stalemate on increased aid funding that had lasted for several months.
Before Mnuchin made this proposal, Senate Majority Leader McConnell said he hoped Congress would pass a coronavirus relief bill that would not grant corporate statutory immunity or relief to state and local governments.
Senate Minority Leader Schumer said McConnell’s proposal to advance economic stimulus negotiations without the assistance of state and local governments was not sincere.
Peter Cardillo, chief market economist at Spartan Capital Securities, said: “Since the White House has returned to discussions, the negotiations on the stimulus plan are heating up.” He added that despite the recent backlash between Republicans and Democrats, But the possibility of reaching a compromise is increasing.
Global stock markets hit a new high on Wednesday and the healthcare sector benefited from the positive news of the new crown vaccine. On Tuesday, the UK became the first Western country to begin mass vaccination, and Pfizer and Johnson & Johnson made further progress in trials and regulatory approvals, respectively.
Investors are also looking forward to the Fed’s two-day policy meeting next week to find clues on the direction of monetary policy.
OANDA Senior Market Analyst Jeffrey Halley said: “A dovish Fed, especially when it wants to set an interest rate cap on the long-term US yield curve, should reignite the rally in gold.”
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