Trump signs the stimulus bill

 Gold prices were thrown about last week as the dollar rebounded sharply from 2-½ year lows after the British pound crumbled on fresh Brexit woes.

Gold tumbled early in the week on the dollar's strength before recovering in recent days on the stimulus drama. The rebound fell short, however, of its Friday settlement of $1,888.90, resulting in the weekly loss reported RSBL team.

Gold prices jumped as much as 1% on Wednesday, bolstered by a weaker dollar, while investors kept hopes pinned on a U.S. stimulus package even after President Donald Trump threatened to not sign the relief bill.

Gold prices rose on Thursday but still finished with a weekly loss, after the twist to a U.S. coronavirus stimulus package and the dollar’s unexpected gains in recent days prevented the yellow metal from extending a three-week rally.

President Donald Trump threatened to not sign an $892 billion coronavirus relief bill, seen as a lifeline for the nation’s pandemic-battered economy saying the amount in the stimulus checks should be increased.

Gold has also been tugged around since Sunday’s deal by U.S. Congress on a $900 coronavirus stimulus and $1.4 trillion in federal government funding. Both those packages are now at a midpoint after President Donald Trump’s refusal to sign them, particularly due to his objection over a measly $600 in personal Covid-19 aid for needy Americans approved by his own Republican party.

But that didn’t affect gold much because Even if Donald Trump declines to sign the bill, it is widely expected that Biden will make it pass.

But against all expectations, the Trump signed the stimulus bill on Monday. Amidst these speculations and developments over weekend Brexit deal, uncertainty over these issues will finally be clear. 

Trump on Sunday signed into law a $2.3 trillion pandemic aid and spending package, restoring unemployment benefits to millions of Americans and averting a partial federal government

The gold (0.27%) price moved higher in early EU trade on Monday. One of the reasons for the move higher in gold came as outgoing US President Donald Trump signed the COVID 19 relief deal.

Volatility continues for gold and silver this week amid a rollercoaster on the U.S. stimulus, new virus strain, and volatility in the dollar index.

Gold markets have gone back and forth during the course of the week, showing signs of exhaustion. Ultimately, top gold dealers across India think that if we get a pullback, we could see an opportunity to pick up gold “on the cheap.”

Over the long term, markets look volatile with a lot of instability on geopolitical grounds. Markets continue to remain in panic mode over the new strain. Moreover massive amount of liquidity has been forced into the market. 

As the uncertainty continues, it’s expected for investors to move to gold in order to protect their wealth. Given this, gold is expected to wave goodbye to 2020 on a positive note.

Buy on Dips

 Gold price attempted to push through the key psychological resistance level of $1,900 an ounce this week but ended up settling just below that on Friday. Gold prices hollowed in on Friday as the decrepit dollar bounced back from 2-½ lows. But that didn’t stop the yellow metal from posting a third straight weekly rise from gains accumulated on bets that the U.S. Congress will soon pass another corona virus fiscal relief.

Gold futures settled with a loss on Friday, but tallied a gain of about 2.5% for the week following a decline in the U.S. dollar. Top gold dealers in India and across the world believed the following to be reasons that had an impact on the dollar:

There were three major events this week that had a profound impact on U.S. equities, gold, silver and the U.S. dollar.

1. Bipartisan deal- The first major event was a renewed optimism on the revision of a bipartisan proposal which was introduced last week. 
2. FOMC Meet- a key event that had a huge impact was the information from the Federal Reserve that was presented through this month’s FOMC statement and the following press conference by Chairman Powell immediately following the conclusion of the last FOMC meeting year. 
3. Vaccine- The third event that influenced the financial markets this week was the rollout of a Covid-19 vaccine that had just been granted emergency use authorization by the FDA.

After US Fed pretty dovish views we saw a collapse of the US Dollar and a big run up in gold and bit coin on Thursday. Though it hit most mentioned targets and even surpassed it to kiss $1901 an ounce.

Analysts from RiddiSiddhi Bullions Limited viewed that with the end of the pandemic was in sight, the U.S. dollar is behaving less like a safe-haven asset, and the currency is weakening, adjusting to its own fundamentals, suggesting strong support for gold.

Gold markets initially fell during the week, but then turned around to recover quite nicely to break above the top of the shooting star from the previous week. This suggests that perhaps gold is trying to turn things around and take off again. The $1900 level will offer a certain amount of psychological and structural resistance, but I do think that we break above there and eventually go challenge the $1950 level. That being said, it does not mean that we get there right away.

So it’s about the $900 billion Covid package from the US. Unless the USD index will now move beyond 90.5, gold will see bounce towards $1905-1915. On Friday the gold market was quite zig zag. Gold has rallied again during the week, breaking above the top of the shooting star from the previous one. It suggests that we still have plenty of momentum.

We would suggest buying gold on dips on levels $1878/1863/1858 and upper side it is expected to reach $1904/1930. So buying in dips would be the investment mantra.