The US dollar continues to lose ground to other major currencies during early Friday trading, as the markets price in the changing political landscape in Washington. It is now beyond any reasonable doubt that President-elect Joe Biden will be sworn-in on January 20. The new administration has ambitious stimulus plans for the US economy and the first year of the incoming President’s mandate is likely to be marked by a coordination of market-friendly fiscal and monetary stimulus, which is likely to keep the greenback under pressure.
The breakdown of the support level of $1,850 has damaged the medium-term trend for gold, opening space for further correction. Positive news regarding Covid vaccines has pushed investors to bet on riskier assets, temporarily reducing their exposure to gold.
With US markets working shorter hours today due to the Thanksgiving long weekend, there are good chances of seeing a relatively quiet trading session with the bullion price moving laterally in the range of the last few days between $1,800 and $1,810. A decline below $1,800 could trigger new selling of the yellow metal, although any return to risk-off strategy together with a weaker dollar would boost gold. For the time being the price is steady, just a few dollars above the four-month low.
Independent writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.