Gold climbs as focus returns to loose monetary policy
· Gold rose 1% on Tuesday, following a sharp slide in the last session, as focus returned to the likelihood of more monetary stimulus to revive a global economy still reeling from the Covid-19 pandemic.
· Spot gold climbed 1.1% to $1,881.39 per ounce by 0605 GMT, while U.S. gold futures were up 0.7% at $1,877.80.
· Prices slumped as much as 5.2% on Monday after U.S. drugmaker Pfizer Inc said its experimental Covid-19 vaccine was more than 90% effective based on initial trial results.
· Central banks are unlikely to change their accommodative stance in the near to medium term as it will take time for a vaccine deployment and a pick-up in growth, inflation and labor market, said Lachlan Shaw, head of commodity research at National Australia Bank.
“If inflation expectations pick up as a result of increased economic activity from the vaccine, that should keep a lid on long U.S. real yields and be a supporting driver for gold.”
· Gold tends to benefit from widespread stimulus as it is considered a hedge against inflation and currency debasement.
· Gold Price Futures (GC) Technical Analysis – Could Strengthen Over $1889.70, Weaken Under $1842.60
Short-Term Outlook
The price action the last two sessions indicates the near-term direction is being controlled by the 50% level at $1889.70 and the 61.8% level at $1842.60.
Bullish Scenario
A sustained move over $1889.70 will indicate the presence of buyers. The first target is the pivot at $1907.10. This is also a potential trigger point for an acceleration to the upside with the next target a resistance cluster at $1966.10 to $1970.10.
Bearish Scenario
A sustained move under $1848.00 will signal the presence of sellers. The first three potential targets are main bottoms at $1819.30, $1788.30 and $1772.00. The latter is a potential trigger point for an acceleration into the June 5 bottom at $1690.10.
· CORONAVIRUS UPDATES:
Total confirmed cases: More than 51,796,321
Total deaths: At least 1,278,529
US cases: At least 10,558,757 (+135,147), and deaths: 245,794 (+1,340)
· Brazil passes 5.7 million COVID-19 cases, death toll at 162,829
· Biden taps progressives, unions for economic, trade and finance transition
· Biden puts health care front and center with a call to expand Obamacare
“Beginning on Jan. 20, Vice President-elect [Kamala] Harris and I will do everything we can to ease the burden of health care on you and your family,” Biden said in a speech in Wilmington, Delaware.
· U.S. Supreme Court justices appear unlikely to throw out Obamacare
· Senate's McConnell backs smaller coronavirus relief bill, omnibus appropriations bill by year's end
· Biden says ‘it’s an embarrassment’ that Trump won’t concede with transition under way
President-elect Joe Biden said Tuesday that the Trump administration’s refusal to authorize the start of the official transition process “does not in any way change the dynamic of what we’re able to do.”
“We have already started the transition; we are well under way,” Biden said at a press conference in Wilmington, Delaware.
· Biden says nothing will stop transition as Trump vows new legal action
· Pompeo ignores Biden’s victory, claims there will be a ‘smooth transition’ to a second Trump term
The State Department didn’t immediately respond to CNBC’s request for a clarification of Pompeo’s remark.
“We’re going to count all the votes,” the nation’s top diplomat added, saying:
· McConnell says he does not expect interrupted presidential transition
Reference: CNBC, Reuters, Worldometers, FX Empire
Thai
Eng