Gold futures are falling lower Tuesday after returning previous gains. Aggressive and counter-trend traders tried to generate some buying interest early in the session after yesterday’s sharp drop, but there was not enough interest to sustain the move. A weaker US dollar was the spark behind the rally, but a turnaround in the dollar helped crush those gains.
At 06:52 GMT, December Comex gold futures are trading at $ 1908.40, down $ 2.20 or -0.12%.
Gold tumbled more than 3% on Monday, falling to its lowest level in more than a month as a market sell-off fueled by uncertainty over increased US fiscal stimulus put pressure on the precious metal along with a US dollar. stronger.
Let’s face it, we are seeing a repeat performance since March / April when stock market weakness led investors to sell gold to cover losses and meet margin calls. We also see investors preferring the Japanese yen, US dollar, and Treasuries for protection, destroying investors who still believe that gold is a safe haven asset. We all know that it is not, it is a store of value that will be used to provide funds when the riskiest assets do not.
Timely fiscal stimulus is unlikely
Ginsburg’s death could lead to a tie in the vote when the Supreme Court hears a challenge to the ACA’s constitutionality in November.
Congress has been stuck for weeks on the size and shape of another coronavirus response bill, in addition to the roughly $ 3 trillion that has already been signed into law.
Daily forecast
Most of the attention of gold traders will continue to be in the direction of the US dollar and appetite for risk. There are economic reports, but it is very likely that the catalyst behind the movement of the dollar and the stock market is the testimony of Fed Chairman Jerome Powell before Congress.
The Federal Reserve remains committed to using all the tools at its disposal to help the US economy recover from the hit of the coronavirus pandemic, President Jerome Powell said Monday.
“We remain committed to using our tools to do what we can, for as long as it takes, to ensure the recovery is as robust as possible and limit lasting damage to the economy.”
Powell said in remarks released ahead of Tuesday’s appearance before the House Financial Services Committee, the first of three days of testimony before Congress this week.
If that’s all Powell is going to say, then there is a risk of a downside for gold because that’s what he said last week when the dollar rose and gold collapsed.
To see all of today’s economic events, see our economic calendar.
