Gold’s Surge Tamed by U.S Dollar Bulls

Sequel to the current price action in play, gold prices suffered their worst losses for the month of January in more than a decade as investors at unprecedented levels liquidated their long positions on the safe-haven hard asset on sighting the ravaging greenback index bulls bridging above the 90 key support lines.

In addition, high price swings seen lately in global equities markets led some investors jittery and also contributing to the increase in demand for the greenback.

Prevailing market conditions show, that there are little economic data on course for this week that could trigger high market liquidity except for the long-awaited U.S stimulus program long-awaiting passage by the U.S congress, thereby catalyzing global investors to place their shorts on the bullion asset momentarily.

Compounding woes on gold bugs include increased odds surrounding the imminent debate about more quantitative easing programs from US fiscal policymakers coupled with significant concerns that demand for physical gold is softening in key international markets that include China and India.

Despite the strength of the greenback, gold bugs are fighting the battle hard around $1825- $1850 price range on account of the precious metal market attracting an army of retail traders referred to as Wallstreetbets, thereby keeping gold at least above the $1,825 price level in the short term taking to account silver prices as recently recorded explosive gains from such traders.

In addition, gold experts predict global central banks will likely remain net buyers of the precious metal this year despite official reserve demand for gold plunging to 10-year lows in 2020.

That said, the odds are pretty much against the precious metal taking into consideration the U.S dollar recent price action shows no signs of slowing down, but still holds well above the $1825/ounce support level, thanks to the U.S Federal Reserve Bank’s hope for an inflationary impulse on the back of the US stimulus deluge.