It should be noted that, as part of the current rally in US stocks, there has been a rebalancing in which traders have shifted from focus tech companies to retail, airlines and other companies that respond to the more traditional consumer economy that has been so severe. affected by the pandemic.
However, I believe there are two major caveats to this rotation. News of a viable vaccine sparked optimism about the light at the end of the tunnel. However, the timeline for achieving this end is still unknown. Moreover, it does not take into account the massive economic benefits that will follow.
With millions of Americans currently out of work and businesses continuing to be affected by the growing number of daily cases, the need for fiscal stimulus is growing every day. It does not seem likely that a budget stimulus bill will be passed before the inauguration in January. Which means that Americans currently facing difficulties will only increase in numbers and the need for a viable aid program will grow greater day by day.
Gold futures closed slightly higher that day as they recovered from last week’s dramatic selloff on Monday. At 4:08 p.m. EST, the most active December contract is currently trading at $ 1,886.80, a net gain of $ 0.60 (+ 0.04%). It is also likely that the positive news about the vaccine is at such an early stage that the economic benefits will continue to grow. It is for this reason that we believe gold will form a base at the current price with major support at $ 1845.
However, on a technical basis, the fact that the 50-day moving average of gold appears to be able to drop below its 100-day moving average could indicate that the price of gold may fall towards the level of. major support at $ 1,845.
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Wishing you, as always, good trading and good health,
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