For the second week in a row, the price of gold is in a bullish correction range. Recent gains were capped by a move towards the resistance level at $1875 an ounce, before the price of the yellow metal stabilized around the level of $1860 per ounce at the time of this writing. The decline of the US dollar to its lowest level in two-and-a-half years had a role in recent gold gains, which faced the wave of risk appetite that prevailed in global financial markets recently following positive news about coronavirus vaccines. Besides the weakening of the US dollar, the yellow metal was supported by concerns about the failure of Brexit negotiations and the growing trade tensions between the United States of America and China. In general, gold remains the preferred safe haven for investors in times of uncertainty.
The continuous rise in coronavirus cases and the increasing number of hospitalizations in the United States raised hopes that more stimulus plans would be approved for the US economy in the face of the pandemic. The US Congress is expected to vote this week on a one-week interim funding bill to give negotiators more time to reach a compromise. In this regard, Chuck Schumer, leader of the Democrats in the US Senate, said that there are signs of progress in the talks on a bipartisan bill.
Silver futures ended trading at $24.736 an ounce, and copper futures settled at $3.4990 a pound.
Investors are waiting for announcements from the European Central Bank's monetary policy meeting on Thursday.
The Japanese Cabinet approved an additional 73.6 trillion yen ($707 billion) economic package, including private funds, to help mitigate the impact of the coronavirus pandemic. Germany is looking to impose tougher restrictions on movement, after the partial nationwide lockdown had little effect on the spread of the disease. Therefore, the French government is likely to postpone lifting some of the COVID-19 closure restrictions next week, amid indications that the country will miss the coronavirus target set by President Emmanuel Macron.
Technical analysis of gold:
So far, the price of gold is in a phase of an upward correction after recent sales, which pushed it towards the support level at $1765 an ounce. The bulls' control over performance will increase if the psychological resistance barrier at $1900 an ounce is crossed. The price is now in a relatively neutral position with an upward bias. The performance awaits the dollar level and the continuity of investor’s risk appetite. I still prefer to buy gold from every lower level and the closest support levels are currently at 1845, 1830 and 1800, respectively. Today's gold price is not expecting any influential US data, and it may interact with the monetary policy decisions from the Canadian Central Bank.
