Another week of losing shine as dollar parties instead by Investing.com

By Barani Krishnan

Investing.com – This is another week of lost luster for gold at the expense of a charging dollar whose power can hardly be explained with the dismantling of the foreign exchange market expected from the proposed pres. Joe Biden’s proposed $ 2 billion coronavirus stimulus.

U.S. markets are turning into a sea of ​​red after the close Friday of the unfortunate December numbers for everything from retail sales to producer price index, manufacturing and consumer sentiment. Gold, which was supposed to be the ‘safe haven’ – or fence or panacea, whatever you call it – joined in.

on Newx’s Comex settled Friday’s official sitting at $ 1,82.90 per ounce, up $ 21.50 or 1.2%. While the standard gold futures contract fell by just 0.3% during the week, the loss increased to a 3.2% rise last week, giving the precious metal the worst two consecutive weeks since November.

Even more striking than the slippage of gold was the dollar’s stand-alone party amid the gloom over stocks and commodities.

It is expected to become a haven on its own, against a basket of six other major currencies, rising 0.6% on a day of 90.7. Some forex traders said the dollar started at less than 90, but by next week it could be above 91.

The dollar was an outlier on Friday despite a drop in bond yields linked to the benchmark, whose revival last week was the catalyst for the return of the greenback.

But what made the whole thing even stranger was the defiance of the dollar against the conspicuous US deficit and debt forecast from the Biden government’s fiscal plans to fight Covid-19. The $ 1.9 billion stimulus announced by the president-elect on Thursday is not expected to be the last for the year.

Usually, when spending on market capitalization is announced through leadership, investors reach a risk appetite a fever, which sends stocks to commodities, including gold, to a high while the dollar falls lower.

Yet there could be a reason for Friday’s consternation in the market, while Wall Street in Washington’s political vine talks about the fact that Biden’s stimulus can still meet resistance in the Senate, despite the simple majority his Democratic Party recommends.

The dollar’s ​​performance, even with the likelihood of a diminishing stimulus, is very logical, especially with Federal Reserve officials spending the entire week denying that speculation will soon diminish in mitigation measures or a looming interest rate hike.