Where Did You Gold? - Gold Prices Fell Slightly with Biden's America Rescue Plan
Illustration photo of Gold Price H4 Chart from dailyfx.com
Gold price fell slightly while the trend continued to consolidate and fluctuate, the U.S. benchmark index and U.S. Treasury yields rose and demand for gold has weakened. President-elect Biden has announced a $1.9 trillion fiscal stimulus plan that continues to lead risk indicators for the yellow metal. However, there may be a moderate rebound in the U.S. inflation expectations that will continue to support gold’s cautious consolidation.
As of 08:06 (GMT+8), gold price rose to $1847.40, up 0.04%.
Incoming U.S. President Joe Biden has announced details of his financial stimulus plan, called the American Rescue Plan. Part of the detail in the $1.9 trillion plan is the payment of $1400 to most Americans, including the $600 paid in December last year, rounding up the payment to $2000. Federal unemployment benefits will be extended until the end of September and increased to $400 weekly and federal minimum wage is also increased to $15 per hour.
State and local governments will receive $350 billion in assistance, K-12 schools and higher educational institutions $170 billion while $50 billion has been set aside for COVID-19 testing. Also allocated is $20 billion for cooperation with states, localities and tribes. Meanwhile, child tax credit will be refunded in full and increased to $3000 per child, or $3600 per child under six years of age. These are just a few of the details in Biden’s first part of two major spending plans. The second bill is expected to be introduced in February and will address reform of infrastructure, job creation, climate change and promotion of long-term goals.
David Madden, market analyst with UK’s CMC Markets says that Biden’s stimulus plans have injected risk sentiment into the market where February gold futures fell $3.50 (0.2%), approximately $1851.40 per ounce.
Gold prices continue to narrow with the lowest price at $1836.60 and highest at $1858.50. The 100-day moving average is currently around $1865.30. If gold prices rise further, it will remain above the 100-day moving average, followed by last week’s high of $1871.68.
There will be a bearish trend if the key support level breaks below Monday’s low of $1817.49.
FOLLOWME XAU/USD Overall Sentiment (As of 09:44 a.m., Jan 15, 2021)
Short - 50.30%
Long - 49.70%
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