By
Olumide AdesinaGold prices ticked up at the last trading session of the week.
The gains prevailing at the precious metal market are coming on
reports pointing jobs data prevailing in the world’s largest economy
hinting a lot still needed to be done coupled with high uncertainty over
the latest U.S. stimulus measures long-awaited by traders.
At about 6.30 am, WAT (West African Time) Gold Futures traded
at $1,841/ounce showing a gain of 0.20%. The U.S dollar, which usually
moves inversely to the precious metal, was down at the early hours of
trading in London.
What this means: The recent American jobs data
revealed 853,000 jobless claims were filed last week more than the
725,000 in forecast as such data suggests that the number of Jobless
claims increased as more companies shut down due to ever-increasing
numbers of COVID-19 cases prevailing at the world’s largest economy.
Stephen Innes, Chief Global Market Strategist at Axi in a note to
Nairametrics spoke on the prevailing circumstances affecting the
precious metal market;
“As we move into 2021, I would expect gold will simply become an
inverse reaction function of the US dollar, which prevailed from
2010-2018. If you think the EURUSD goes to 1.25, you unequivocally need
to own gold.
“In the meantime, the lack of progress on the US fiscal deal the
next and possibly more powerful knockdown to gold and silver could come
from growing optimism over the vaccine.
“There is enough positive vaccine feel good to keep gold and
silver pressured, near-term. The FDA approval could come as soon as
Friday or Saturday, with the first US injections happening on Sunday or
Monday, according to the chief adviser to the Trump administration on
vaccine development,” Innes said.
What to expect; Investors, however, anticipate news
from COVID-19 vaccines might continue to undermine gold and silver’s
“safe-haven” demand in the mid-term as it is rolled out.
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