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Original title: Gold ushered in another wave of earnings, leaning on the $ 1,875 fiscal stimulus and Brexit has new news.
FX168 Financial News (North America) News Gold priceIt rose to a two-week high on Tuesday (Dec. 8), fueled by the weakening US dollar and growing expectations that the United States will introduce more fiscal stimulus measures to counter the economic impact of the surge in new coronavirus cases.
In the US market, spot gold prices rose 0.6%, reaching a high of $ 1,875.19 an ounce since November 23.
(30 Minute Gold Spot Chart, Source: FX168)
“It’s clear that the US Congress needs to pass some kind of fiscal stimulus. Higher fiscal spending is good for gold, and the market seems to expect some kind of fiscal stimulus to be passed, if only temporarily,” the chief said. Precious Metals from HSBC. Analyst James Steel said in a report.
Steel also noted that while the general weakening of the US dollar, negative real interest rates and the “relentless rise in new crowns” are good for gold and silver, “more good news about vaccines will be a strong disadvantage.” .
The US dollar index remains near a two-and-a-half-year low, increasing the attractiveness of gold to holders of other currencies.
With the growing number of coronavirus cases, the United States Congress is expected to vote this week on a one-week interim appropriations bill to provide more time to reach an economic relief agreement for the novel coronavirus.
The Speaker of the United States House of Representatives, Pelosi, said on the day that he hopes to reach a new agreement to alleviate the corona epidemic, accepting the stimulus bill that contains a check worth 1,200 US dollars. , but that ultimately depends on Trump.
Gold is considered a hedge against inflation and currency devaluation. It has risen more than 23% this year, benefiting from the higher inflationary risks that near-zero interest rates and large-scale global stimulus measures can generate.
At the same time, the UK has started vaccinating the new corona vaccine on Tuesday.
“The vaccine will no longer be available to the rest of the population until next year, not now. The economic challenges still exist and we still need financial or monetary support,” said UBS analyst Giovanni Staunovo. He added that the vaccine may have a negative impact on gold in the second half of 2021.
The progress of the Brexit negotiations has also attracted the attention of investors. The teleconference between British Prime Minister Johnson and the President of the European Commission, Von der Lein, yesterday was unsuccessful. He said today that while he hopes to reach a deal, it will be “very difficult” to reach a Brexit deal before the next EU Council summit in Brussels on Thursday.
The British side recently stated that British Prime Minister Johnson will go to Brussels tomorrow to have dinner with Von der Lein and continue to discuss the future relationship between the UK and the EU.
The transition period for Brexit will end on December 31. If no deal is reached by then, the UK will “toughen Brexit”, meaning that trade between Britain and Europe may encounter additional tariff and quota restrictions, leading to the emergence of border areas between the countries. Two parts. confusion. Previously, due to differences between the two parties, trade negotiations between the UK and Europe had stalled.
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