As of 3:20 PM EST, the gold futures base, the most active Comex contract in February 2021, is set at $ 1,883.40, after considering $ 3.00 (0.16%) of earnings. While on the surface this could be interpreted as an offer from the highest precious metal traders, in today’s stock it was 100% due to the weak dollar. The US dollar was traded under pressure today, down 4/10 from one percent and, after considering the 37-point decline, is set at 89.905. Simple math tells us that the dollar’s 0.40% drop is slightly more than double the 0.16% gain in gold futures today.
The same result in spot gold can be seen when viewing the KGX (Kitco Gold Index) which shows that as of 3:41 PM EST spot gold was set at $ 1,878.40, which is a net gain of $ 5.50 or + 0.29%. On closer inspection, we can see that traders contributed a fractional selling pressure of around $ 1.20 per ounce. It was the weakness of the dollar that contributed $ 6.70 and resulted in today’s net gain of $ 5.50.
Many of today’s net changes in the financial markets have been associated with confusion as majority lead senator Mitch McConnell blocked Senator Chuck Schumer’s effort to increase direct payments for the new round of fiscal stimulus from $ 600 to $ 2,000. Yesterday, the House passed a related bill to address the amount of stimulus that would be allocated through direct payments as part of the fiscal stimulus package signed by President Trump on Sunday.
Technical support for the gold price over the past three days was defined by intraday lows that came very close to the 50-day moving average, currently set at $ 1,870.90. Below the 50-day moving average, the next level of support is at $ 1,860 and is based on a series of lows that occurred on December 22 and 23.
Resistance in the last five trading days was defined by the 100-day moving average for gold, currently set at $ 1,904.50. In the past seven trading days, gold was traded to an intraday high only twice on the 100-day moving average. But in both attempts it was unable to sustain a price above the 100-day moving average, let alone close above that price.
Another important factor that has pushed gold prices recently has been a strong sense of risk in the market, in which market participants favored US stocks for potential returns rather than an escape to the safe haven of gold. Then there is the question of Bitcoin’s historic escalation to the all-time record price, capturing part of the capital that would have flowed into gold. Bitcoin futures (BTC F21) traded on the Chicago Mercantile Exchange gained $ 280 today and are currently set at $ 27,370 per currency. This is the highest future price ever recorded for a single currency. During the weekend, Bitcoin’s price rose by more than $ 3,000, causing a gap between closing on Friday and opening on Monday morning.
For more information about our service, just use this link.
Wishing you as always, good trade and good health,
Legal Notice: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes. It is not a request to make any exchange of goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article are not responsible for losses and / or damages arising from the use of this publication.