Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
James Hyerczyk
Comex Gold

Comex Gold futures are moving higher on Thursday, driven by a weaker U.S. Dollar, which is making the dollar-denominated asset a more attractive asset to foreign buyers. The dollar is weakening because the strong rally in the stock market is dampening its appeal as a safe-haven asset. The catalyst behind the price action is the hope of a new stimulus package.

At 07:36 GMT, December Comex gold futures are trading $1900.90, up $5.40 or +0.28

Despite the early strength in the market, the buying still looks a little tentative because of the volatility attached to the stimulus deal. Policymakers hadn’t discussed the matter for weeks then early Wednesday it moved back to the forefront.

The stimulus story was not the only supportive news. There was also the release of better than expected U.S. economic data. This too dampened the dollar’s appeal as a safe-haven asset.

The key issue regarding the stimulus deal is whether it going to be something real, or something symbolic. At that point it’s hard to say how gold traders will react. A “real deal” will likely be supportive because more money pumped into the economy will reduce the value of the dollar. New stimulus is also likely to drive investors out of the safety of the greenback and into higher-yielding assets.

We may not necessarily see the same reactions if there is a “symbolic deal”. The biggest concern about that will be the timing of the actual deal. A symbolic deal likely means we may not see an actual deal until after the November 3 presidential election.

Economic News

Upbeat economic news also weighed on the U.S. Dollar, supporting gold prices on Wednesday. A spate of economic data mostly surprised to the upside, with ADP National Employment index blowing past analyst expectations and pending home sales surging to an all-time high.

U.S. private employers stepped up hiring in September, but diminishing government financial assistance and a resurgence in new COVID-19 cases in some parts of the country could slow the labor market’s recovery from the pandemic.

Other data on Wednesday confirmed that the economy suffered its sharpest contraction in at least 73 years in the second quarter because of the disruptions from the coronavirus. Record growth is predicted in the third quarter, buoyed by fiscal stimulus and the resumption of many business operations.


Daily Forecast

With Mnuchin and Pelosi saying that talks about a deal had failed, but that they “made a lot of progress” on the long-awaited COVID-19 relief legislation, today’s focus may shift to the weekly jobless claims report and Friday’s U.S. Non-Farm Payrolls report.

If U.S. jobs data comes at least in line with expectations and as long as the wage inflation number is strong, gold’s gains may be limited.

For a look at all of today’s economic events, check out our economic calendar.
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.