Gold Bulls Roaring Loud, But Hurdles Remain

The yellow metal is regaining its shine despite reports revealing the first approval for Pfizer’s COVID-19 vaccine in the United Kingdom; howbeit the recent retreat by the U.S dollar might have given gold bulls enough gas in pushing gold prices within the striking distance of $1850/ounce.

At the time of writing the precious metal prices at the futures market rallied higher by 0.7%, priced at around $1,843/ounce, trading far above the $1,800 mark. Gold traders are now keeping an eye on the latest updates surrounding the U.S. stimulus deal.

Recent price action reveals gold bulls seem delighted on the macro, hinting a renewal of the US fiscal stimulus deal, as the deal is much larger than many traders had earlier anticipated and have the support of the two major American political parties.

Gold Bears have been subdued on recent fundamentals coming from the world’s largest economy, showing a softer US ADP, taking to account that while November’s U.S private sector hiring saw surged, such gains continue to weaken, as the American private sector hiring increased by 307,000 in November, missing the market expectation of 410,000.

In addition, gold bulls are expected to remain in the picture at least for the near term on the bias that the COVID-19 vaccine-driven economic hopes continue to pressure the U.S dollar value lower, rendering gold-positive.

Still, gold bulls might not enjoy the driving seat for long, as they face an overhead resistance around the $1850/0unce price area, thus a sharp rejection around that price level could likely put the gold bears back in the driving seat.

That said, recent surge in the US nominal and interest real rates could also make it difficult for the precious metal to rally above $1850/ounce.