Gold bulls are unstoppable while taking the bids near $2,020 during the early Wednesday morning in Asia. The yellow metal pierced the $2,000 psychological magnet to refresh the record top the previous day. Though, the latest high of $2,026.36 tops it all amid the market’s rush to risk-safety.
The phrase seems to best describe the recent run-up by the yellow metal. Be it the uncertainty surrounding the much-awaited US fiscal stimulus or the coronavirus (COVID-19) resurgence, not to forget the latest flare-up in the tension between America and China, everything favors the precious metal bulls.
US policymakers are still jostling over the phase 4.0 COVID-19 relief package. The talks became tough after unemployment claims benefits expired on Friday. While the House Speaker Nancy Pelosi blames US President Donald Trump for the delay, the Republican leader signals to bypass the Congress and offer jobless claims benefits as per his terms. It should be noted that the American Senators will go on a vacation at the end of this week, which in turn makes the decision on the relief package much more important.
Elsewhere, blasts in Beirut’s Lebanon took over 70 lives and injured 3,700 people on Tuesday. US President Trump suggested it as an attack and flared up tensions. Furthermore, China’s TikTok is under immense pressure to sell its stake to Microsoft, which in turn escalates the Sino-American tension. Though, the Chinese Ambassador to the US Cui Tiankai tried to placate the tensions off-late.
Amid all these catalysts, market players failed to cheer upbeat prints of US Factory Orders and stabilization of the virus numbers from the US and Australia. While portraying the same, Wall Street marked upbeat closing on Tuesday but the US 10-year Treasury yields remained depressed near March month’s low.
Looking forward, traders will be interested in the news concerning the US fiscal plan for immediate direction. Also important will be the US ADP Employment Change and ISM Non-Manufacturing PMI, as well as updates on the virus and Sino-American tension. Given the recently increased odds of an agreement among the US policymakers over the aid package, gold buyers should be cautious near the record highs.
While $2,000 offers immediate support, bulls are less likely to leave the desks unless gold prices drop below the previous record of $1,921. As a result, $2,100 seems to be up on their radars.