Gold prices, at the time this report was drafted, traded around the $1,870 per ounce price level having gained 1.7% on Wednesday.
That was the biggest single-day percentage gain sighted in the precious metal’s market in two weeks.
In the past few days, gold bugs held their grip on the precious market, as the dollar recorded significant losses in its value for about three straight trading sessions. Gold bears seem to have lost their nerves in facing Janet Yellen’s, expansive approach to fiscal policy.
Although the, US 10-yr Treasury yields were looking unchanged, news that the new U.S Secretary for Treasury will “go big” on pushing for more stimulus programs, excited gold traders in taking long positions arbitrarily.
Having announced a $1.9 trillion stimulus package plan a few days back, the new U.S President’s economic team is now strategizing on how to support two interrelated issues, which include the environment and infrastructure.
Such agenda listed above are expected to boost spending and create jobs in the world’s biggest economy coupled with increasing more liquidity in financial markets, which could see gold prices breaking the $1,900 price levels once again.
Also with the U.S Central bank and U.S Treasury going dovish, it provides an incredible support for gold bugs to remain relevant at the bullion market at least for the mid-term.
That said, futuristic gains in the precious metal could however remain elusive if the US Treasury yields rally high, putting a bid under the US dollar, the yellow metal’s biggest enemy.