It’s key to knowing that since gold prices bounced off from a price band of $1,852/ounce to near $1,880/ounce at last week’s trading session, the bulls seem to be suppressed on conflicting macros playing on mixed signals that include CO VID-19 vaccines, the second wave and most importantly the recent tussle between the US Fed Reserve Bank and U.S Treasury, left gold traders clueless and literally frozen on the next move to take.
Gold traders are presently having it rough, in spite of the greenback’s often decline amid the bias that once Pfizer’s COVID-19 vaccine hits the market, market confidence among global investors might push the safe-haven asset below the $1,800 support level, as it now seems very likely that such vaccine would get an approval for emergency use from the Food Drug Administration.
However, ruling out gold bulls could be expensive taking to account recent moves from the US Treasury recent action, as it surprisingly cut emergency funding and called for funds back from the U.S central bank, kept traders stunned, despite recent efforts by the U.S Treasury Secretary Steven Terner Mnuchin to pass more stimuli.
Such conflicting macros presently prevailing are significantly responsible for the recent confusion taking its toll on the gold market and to a degree, offsetting market volatility in the precious metal market.
Yet, COVID-19 caseloads are exploding at an alarming rate, on recent reports coming from emerged market revealing record high hospitalization rate in the world’s largest economy and Western Europe, not forgetting the latest resurgence key markets like Japan and India.