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

A rise in U.S. Treasury yields and a slight recovery from an earlier setback by the U.S. Dollar are weighing on gold prices on Monday after an early rally attempt failed. Increased demand for riskier stocks and currencies is also helping to generate some downside pressure.

At 12:46 GMT, December Comex gold futures are trading $1872.80, down $13.40 or -0.71%.

Unlike last Monday, gold is responding to demand for stocks, which appears to be encouraging traders to sell Government bonds, driving yields higher. The move suggests that today is going to be a “risk-on” session with the U.S. Dollar on the outside looking in. Should the dollar participate in the demand for risk, however, then look for gold to break sharply throughout the session.

Earlier in the session, gold was trading firm as COVID-19 cases continued to mount, raising investor expectations of further stimulus measures, while a subdued dollar added support. Coronavirus cases crossed the 11-million mark in the United States on Sunday.

However, today’s price action suggests traders aren’t paying too much attention to the rising COVID-19 number and perhaps more attention to a faster recovery in the U.S. economy as pharmaceutical companies are positioned to release even more positive developments on the coronavirus vaccine front.

Furthermore, traders don’t seem to be optimistic about a fiscal stimulus package over the short-run with both Democrats and Republicans seemingly steeping away from the negotiation table when states continue to finalize the voting for the House of Representatives and Senate.

Strong Chinese factory output data is also pressuring gold prices because it likely means the global economy won’t fall apart over the near-term.

Finally, longer-term gold traders are aware that any extreme weakness will be met with aggressive buying with the Federal Reserve watching their backs.

Daily Forecast

We could see short-term weakness throughout the session as traders await more positive COVID-19 news from the drug company labs. Additionally, gold is going to have a hard time rebounding higher without fiscal stimulus. Conditions could change rather quickly in the markets if the Republicans and Democrats announce they are returning to the stimulus negotiation table.

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.