FXEMPIRE
All
Ad
Advertisement
Advertisement
James Hyerczyk
Add to Bookmarks
Comex Gold

Gold futures are trading higher shortly after the mid-session on Wednesday as traders continued to react positively to comments from U.S. Treasury Secretary nominee Janet Yellen the previous day. Yellen essentially bolstered bets for another stimulus package under President Joe Biden that could pressure the U.S. Dollar, while driving up foreign demand for the dollar-denominated asset.

At 18:35 GMT, April Comex gold is trading $1872.30, up $28.30 or +1.53%.

Advertisement
Know where Gold is headed? Take advantage now with 

75% of retail CFD investors lose money

Focus Shifts Toward Biden Administration

Gold traders started to form a support base last week with the release of President Joe Biden’s stimulus package proposal. Biden outlined a $1.9 trillion coronavirus relief package, saying bold investment was needed to jump-start the economy and accelerate the distribution of vaccines to bring the coronavirus under control.

Biden campaigned last year on a promise to take the pandemic more seriously than President Donald Trump, and the package aims to put that pledge into action with an influx of resources for the COVID-19 response and economic recovery.

The aid package includes $415 billion to bolster the response to the virus and the rollout of COVID-19 vaccines, some $1 trillion in direct relief to households, and roughly $440 billion for small businesses and communities particularly hard hit by the pandemic.

Biden’s plan is meant to kick off his time in office with a large bill that sets his short-term agenda into motion quickly.

Transition officials said Biden’s plan will be a rescue package that will be followed up with another recovery package in the coming weeks.

Janet Yellen, U.S. President Joe Biden’s nominee for Treasury Secretary, sparked an even bigger response from the market than Biden when she urged lawmakers on Tuesday to “act big” on coronavirus relief spending, arguing that the economic benefits far outweigh the risks of a higher debt burden.

Yellen also said that the value of the dollar should be determined by markets, a break from departing President Donald Trump’s desire for a weaker U.S. currency.

“The United States does not seek a weaker currency to gain competitive advantage and we should oppose attempts by other countries to do so,” she said.

Advertisement

Short-Term Outlook

The huge rally on Wednesday is impressive, but it may be just a reaction to the inauguration of President Biden.

Biden’s relief package looks bullish on paper, but it still has to be paid for and that could mean higher Treasury yields, which ultimately dictate the direction of gold prices.

The gold rally could be short-lived if Treasury yields continue rise.

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