Gold is Under Pressure, Slides Despite Weak US Data
The yellow metal losses compounded on Tuesday. This may be extended today as Joe Biden is inaugurated. The crumbling gold prices is amid a string of weak fundamentals from the United States. Last week, Jerome Powell quashed hopes of rate hikes saying fund rates will remain at record low levels and bond purchases won't be tapered but remain as it is for a little longer as the economy remains at a precarious level. This, combined with lower-than-expected retail sales, didn't put down USD bulls, pressuring gold prices.
Gold prices remain suppressed versus the USD at a time when Joe Biden is being inaugurated. Although his policies would further pump free money into the economy, theoretically leading to high inflation—a net positive for gold, his attempts would spare the US of deflation. It is at a critical time when the economy is wriggling under the cusp of COVID-19 and reeling from the political acrimony of the last few weeks. Overly, what's lined up in the next few weeks is supportive of the greenback. In risk averseness and rising bond yields, gold prices look likely to trend lower, clipping gains of Q4 2020.
Impact on Gold Prices:
Bearish. In a risk-off environment and confidence in the US economy, gold prices may track lower, retracing from their highs. Still, gold performance depends on how well Joe Biden's administration executes their campaign promises helping steer the economy in a recession.
More market news over on our Blog
This website is not directed at any jurisdiction and is not intended for any use that would be contrary to local law or regulation.
CryptoAltum does not accept any clients under the age of 18.