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Gold Rally Continues On Stimulus Hopes

By Abhishek BansalCommoditiesFeb 10, 2021 04:34AM ET
www.investing.com/analysis/gold-rally-continues-on-stimulus-hopes-200559735
Gold Rally Continues On Stimulus Hopes
By Abhishek Bansal   |  Feb 10, 2021 04:34AM ET
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Gold and silver prices are holding gains from the last two days, on stimulus hopes in the US and weakness in the US Dollar Index. Gold futures contracts are trading near $1,845, sharply higher from last week’s low of $1,784.60. Meanwhile, the dollar index is trading near 90.28, sharply lower from the last high of 91.61.

President Joseph Biden said on Tuesday that he agreed with a proposal by Democrat lawmakers that would limit or phase out the planned $1,4000 stimulus payments to higher-income individuals.  Meanwhile, the House of Representatives will vote on the bill on Feb. 22. It will become necessary to pass the bill by mid-March, when enhanced jobless benefits approved in a December 2020 aid package expire.

Rising inflation expectations are also keeping gold prices firm. Strength in Chinese credit growth may fuel faster inflation, as per official data, China's January new yuan loans rose by a record +3.580 trillion yuan (data from 1992), against expectations of +3.500 trillion yuan. Meanwhile, the Chinese CPI grew 1% month-on-month, but fell 0.3% year-on-year, and the PPI grew 0.3% year-on-year in January. Also German CPI figures rose by 0.8%, in-line with estimates.
The yield on the benchmark US 10-year Treasury notes was last at 1.157 percent, not far from Monday’s 10-and-a-half-month high of 1.20 percent. Rising bond yields are likely to keep a lid on precious metals.

Fed Chair, Jerome Powell's speech, and US CPI data are likely to provide further direction later today.

Gold prices are likely to find support around the 200 days EMA at $1,832, while a key resistance is seen near $1,857-$1,866 levels.

Gold Rally Continues On Stimulus Hopes
 

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Gold Rally Continues On Stimulus Hopes

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Disclaimer: Mr. Abhishek Bansal is a new-age, first-generation entrepreneur, and the Founder Chairman of Abans Group, a quintessential diversified business group, providing expertise in Broking Services, Non-Banking Financial Dealings, Financial Services, Agri-Commodity Services, Warehousing, Realty & Infrastructure, Gold Dore Refinery & Manufacturing, and Trading in Metal Products, Pharmaceuticals, Software Development & Wealth Management.
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