Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
Gary S.Wagner

This will mark the second consecutive day in which gold has closed higher than the previous day.

On Wednesday, January 6, 2021 gold futures managed to trade to a high of $1960 before market sentiment quickly turned bearish, creating selling pressure that would last for three days and take gold futures down to $1908. Thursday’s action resulted in gold closing higher than Wednesday but lower on the day.

Know where Gold is headed? Take advantage now with 

75% of retail CFD investors lose money

However, it was Friday, January 8 when market participants witnessed the steepest single day decline since November 9, 2020. Novembers decline resulted in gold giving up $102. Gold futures opened at approximately $1915, but selling pressure took the precious yellow metal significantly lower to $1835. On last Friday gold prices opened above the 100-, 50- and 200-day moving averages and closed below all three key averages. This is the first occasion since November 27 that gold pricing traded and closed below the long-term 200 day moving average.

The 200-day average is widely accepted as an indication of long-term trend direction and momentum. Simply put as long as a commodity is trading above the average is considered to be in a long-term bullish phase, reciprocally when a commodity is trading below the average it signals that price action is in a long-term bearish cycle.

Although Mondays low dipped below $1820 for a brief moment, prices recovered and gold closed once again above $1850. This marks the second consecutive day on the price range between the open and closing pricing is above the 200-day moving average. It also is a strong indication that gold pricing is attempting to form a base before moving to higher pricing.

Our technical studies indicate that there are two primary levels of resistance. The first level occurs at gold’s 50-day moving average which is currently fixed at $1869.40. The next level is based upon the 100-day moving average which is currently at $1896.30. The key and critical support level which must follow is $1841 which is the current value of the 200-day moving average.

Strong fundamentals continue to be highly supportive of higher gold prices

As long as gold remains above $1840, the current fundamental events which took gold prices to its all-time record high last year are continuing to wreak havoc on the global economy. In March last year the coronavirus epidemic officially became a global pandemic. Today there been over 91 million individuals who have become infected by the virus resulting in almost 2 million deaths worldwide.

More worrisome is the fact that in many parts of the world daily Covid-19 infection rates are at an all-time, and now even with a vaccine being administered globally, the virus responsible for the pandemic has mutated. This mutation is harder to contain, which leading to higher infection rates. This is the primary cause for the global economic contraction, as many countries mandated measures to curtail the spread of the virus and in essence locking down many parts’ world.

The global pandemic is directly responsible for the trillions upon trillions of dollars that countries worldwide have needed for aid and financial support for the millions of individuals that lack a viable means of support, along with countless businesses that are under immense pressure to simply remain solvent.

With the upcoming inauguration of President-elect Joe Biden, it is highly expected that he will present one of the largest stimulus packages in history. President-elect Biden announced on Friday that there was extremely need for extra financial relief for Americans” now”. This announcement came following the latest US Labor Department’s jobs report which showed losses for the first time in eight months.

The most important day this week will occur on Thursday when President-elect Biden will be “laying out the groundwork” for his COVID-19 relief package. The aid package he presents could easily dwarfed the $4 trillion already allocated for the first two rounds of fiscal stimulus by the US Treasury Department over the last six months. Combined the trillions of dollars that will be needed could easily be the largest expenditure, and that the United States has ever incurred. This means that even after the pandemic has run its course the economic fallout that will occur will be felt for years to come.

For more information on our service simply use this link.

Wishing you as always, good trading and good health,

Gary S. Wagner

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.