Gold opened 2020 with a striking momentum, hitting as high as $1,950/ounce. Despite the following rosy expectations, the yellow metal,
instead of extending their gains, suffered from huge losses.To get more
news about
WikiFX, you can visit wikifx official website.
Gold prices endured a loss in excess of -2.5% during the first week of
the year. What's more, the US Non-Farm Payrolls released in the second
week dragged them below the $1,900 barrier, a drop of more than $100.
The mounting uncertainties arise from the rampant pandemic contributed
to the previous boom in gold. With the US Treasury yields moving
higher, however, traders picked up their risk appetite, which shocked
the yellow metal heavily.
Inflation expectations have found their growth hampered, despite the
boost from the US fiscal stimulus. As a result, the US real yields
increase, undercutting the appeal of gold.
While the longer-term fiscal stimulus measures in the context of a
low-interest rate should be beneficial for gold prices, it may prove to
be tough sledding for gold prices the next few weeks if US Treasury
yields sustain their advance.
Technically speaking, golds return back to the August-November 2020 downtrend may pave the way for further losses.
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