Spot gold continued its narrow and sideways trend since overnight. The market is waiting for the new US President Biden and the new Treasury Secretary Yellen to make further comments on the policy outlook afterwards, and at the same time wait and see what may happen when the presidential power transfers. Market news and emotional conditions fluctuate, so market trading activities appear cautious. The prospect of a large-scale epidemic relief in the United States overwhelms the impact of a stronger US dollar and boosts the attractiveness of gold as an inflation hedge asset. This is also the key to yesterday's low rebound in gold.
U.S. President-elect Biden’s Treasury Secretary’s nominee Yellen will tell the Senate Finance Committee on Tuesday that the government must “take large-scale actions” when introducing a new round of COVID-19 assistance. Lun nominated to hold a hearing for the US Treasury Secretary. Then on Wednesday (20th) Biden will hold an inauguration ceremony. Washington is waiting. Due to the previous congressional incident in Washington, the atmosphere before the inauguration of the new president is extremely tense, the Capitol is heavily guarded, and the market risk aversion has increased.
The global quantitative easing may continue to increase in 2021, which will provide support for the medium and long-term rise of gold prices. However, in the short term, the U.S. dollar seems to be more favored by investors. With the strong aid of the new U.S. government and the optimism of accelerated vaccine application, investors believe that the U.S. economy can recover quickly, U.S. bond yields remain high, and the U.S. dollar is also strong from a low position. The rebound, short-term gold price shocks are mainly bearish, but due to the market's mid- to long-term inflation concerns, this limits the room for gold prices to fall to a certain extent.
Gold trading reminder:
The price of gold fell sharply this week and then hit the bottom and rebounded, and finally bucked the trend and closed the sun. The beginning of this trend is not ideal for the continued decline at the beginning of the week that we were optimistic about. The price of gold is currently in a wide range of consolidation, but the short forces still take the initiative. It is expected to continue to fall. Especially after the disclosure of Yellen's attitude towards the US dollar, the weak trend of the US dollar may be reversed. The top pays attention to the 200-day moving average and the 1840-1842 area on the downward side of the cloud to continue to do high-altitude layout. For more real online guidance, follow the WeChat public account: Tianci teacher.
Mid-line investors ignore short-term fluctuations and pursue the ultimate profit. Short-term investors can follow the rules of the technical level to find trading signals. No matter what kind of trading strategy you are, execute it according to your own style and clear goals. Can get twice the result with half the effort. Judging the market is only a part of trading. Investors need to be in awe of the market, keep trading discipline in mind, and at the same time exercise strict control over their positions, reduce greed, overcome fear, and try to maintain a normal mind in trading.
