Gold was trading lower, as investors anticipated the results of the Georgia runoff election that would resemble the possibility of additional stimulus measures.
Gold futures decreased 0.18% at $1,943 but kept trading above the $1,900 rate. Prices increased more than 2% during the previous session, shifted by growing numbers of coronavirus cases and shutdowns, and a decreasing dollar.
The dollar was trading down as of this writing.
The two open Senate seats in the Georgia election would determine political control, and the conditions under which Joe Biden would be able to bestow his agenda that comprises rewriting the tax code to increase stimulus, as soon as his team starts working.
The U.S. Federal Reserve will soon announce the results from its December meeting. Cleveland Federal Reserve Bank President Loretta Mester said that monetary policy will stay accommodative for “quite some time.”
The number of coronavirus cases keeps spreading. Meanwhile, the U.K. Prime Minister Boris Johnson announced a new national shutdown that made the investors focus on the safe-haven assets.
Many traders as well as Craig Erlam, Oanda Corp senior market analyst explained that the coronavirus cases increase during the Christmas holidays and stricter limitations would significantly affect the global economy. With this being said, the effect will mostly take over the first quarter of the year as massive vaccination continues.
“Gold burst through $1,900 to start the year, with a softer dollar giving the yellow metal the kick it craved,” he said. Following its direction to $1,945, and with the forecast for the dollar looking not very optimistic, “another run at $2,000 suddenly looks a matter of time,” Erlam added.