Gold prices were thrown about last week as the dollar rebounded sharply from 2-½ year lows after the British pound crumbled on fresh Brexit woes.
Gold tumbled early in the week on the dollar’s strength before recovering in recent days on the stimulus drama. The rebound fell short, however, of its Friday settlement of $1,888.90, resulting in the weekly loss reported.
Gold prices jumped as much as 1% on Wednesday, bolstered by a weaker dollar, while investors kept hopes pinned on a U.S. stimulus package even after President Donald Trump threatened to not sign the relief bill.
Gold prices rose on Thursday but still finished with a weekly loss, after the twist to a U.S. coronavirus stimulus package and the dollar’s unexpected gains in recent days prevented the yellow metal from extending a three-week rally.
President Donald Trump threatened to not sign an $892 billion coronavirus relief bill, seen as a lifeline for the nation’s pandemic-battered economy saying the amount in the stimulus checks should be increased.
Gold has also been tugged around since Sunday’s deal by U.S. Congress on a $900 coronavirus stimulus and $1.4 trillion in federal government funding. Both those packages are now at a midpoint after President Donald Trump’s refusal to sign them, particularly due to his objection over a measly $600 in personal Covid-19 aid for needy Americans approved by his own Republican party.
But that didn’t affect gold much because Even if Donald Trump declines to sign the bill, it is widely expected that Biden will make it pass.
But against all expectations, the Trump signed the stimulus bill on Monday. Amidst these speculations and developments over weekend Brexit deal, uncertainty over these issues will finally be clear.
Trump on Sunday signed into law a $2.3 trillion pandemic aid and spending package, restoring unemployment benefits to millions of Americans and averting a partial federal government
The gold (0.27%) price moved higher in early EU trade on Monday. One of the reasons for the move higher in gold came as outgoing US President Donald Trump signed the COVID 19 relief deal.
Volatility continues for gold and silver this week amid a rollercoaster on the U.S. stimulus, new virus strain, and volatility in the dollar index.
The constant dips and high that gold markets witnessed during this week also displayed signs of exhaustion for the yellow metal. Market analysts from RiddiSiddhi Bullions Limited are of the opinion that after the pullback there is the opportunity to pick up gold “on the cheap. This idea was confirmed by Mr. Prithviraj Kothari of RSBL.
Over the long term, markets look volatile with a lot of instability on geopolitical grounds. Markets continue to remain in panic mode over the new strain. Moreover massive amount of liquidity has been forced into the market.
As the uncertainty continues, it’s expected for investors to move to gold in order to protect their wealth. Given this, gold is expected to wave goodbye to 2020 on a positive note believed the bullion king of India.