Gold futures were up by 0.80% to $1,859.60 by 12.01pm GMT .Gold is at a nine-year high, rising to points it has not touched since September 2011.
The macros boosting gold traders, in keeping their long positions include the massive stimulus packages coming from emerged markets, a resurgence of the ravaging COVID-19 virus onslaught, and the weakening US dollar.
The bullish run recorded in the gold market is firmly entrenched so its expected, the rally might push gold to hit $2,000 before the end of 2020.
“The fact that governments, central banks and pretty much everyone else are looking to more fiscal and monetary policy inputs is helping drive the yellow metal,” said Michael Hewson, chief market analyst at CMC Markets UK.
Looking into gold’s price levels, gold traders have kept gold’s price above a vital resistance level of $1,850. Although gold bulls appear out of gas when it approached the $1865 level, update on COVID-19 vaccines is likely to make gold traders pull back some of their long positions, and increase their profit taking to the $1,825 support levels.
However, world’s largest economy on Tuesday recorded its highest death toll in 24 hours period since June, thereby giving gold bulls enough gas to push the price beyond the $1,865 levels.
In addition with U.S interest rate at an all-time low, nothing seems to stop the gold bulls, except for the macros in recent days that COVID-19 vaccines are showing promising signs from their early clinical results.
Consequently, as U.S fiscal officials keep negotiations ongoing on quantitative easing. Whatever the result from the meeting will be positive for the yellow metal, as more stimulus packages, will increase government spending, U.S debts, and inflation.(natural catalyst for gold bulls)
It critical to understand that, the correlation between gold and the equities market, have not been following its past historical patterns lately as the yellows metal typically moves in opposite direction from global equity markets, especially the American stock market.