So far today (Wednesday) gold has seen no significant movement yet and tends to be choppy. Market worry about new economic damage and optimism about a vaccine appear to be fading and dampening risk appetite is likely to energize the XAUUSD, but it looks like gold is being left behind by investors who are holding back on buying gold and instead flirting with cryptocurrencies, which are getting more and more interesting. Gold positions at the time of writing are moving at the price $1877.00 with resistance at the 1900.00 psychological level, while BTCUSD has been trading above $18,000 and seems likely to reach 3-year highs.
In the previous session, Fed Chair Jerome Powell highlighted that the economic damage caused by the pandemic in the US requires more stimulus measures to offset and the economic recovery will still take a long time. Powell’s statement served to increase gold’s safe haven appeal, and with the release of weak economic data from the US providing additional support for his sentiment, gold should start moving upwards.
The risk sentiment was further weakened by ECB President Christine Lagarde’s remarks on how the vaccine news will not change the central bank’s economic forecasts. This statement is also in line with Powell’s latest statement that even with a vaccine, economic recovery could take longer than previously anticipated.
Gold prices should also be energized by UK PM Boris Johnson’s latest statement highlighting uncertainty about a post-Brexit trade deal between the EU and UK. According to Johnson, there is still no confirmation whether the two sides will finalize a trade agreement but he is adamant that Britain will flourish whether such a deal goes into effect or not, and this increases the chances of a no-deal Brexit.
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Analyst – HF Indonesia
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