As of 3:20 p.m., the EST Gold Contract for Gold, the most active Comex contract in February 2021, was set at $ 1883.40 after offsetting the gain of $ 3.00 (0.16%). Although on the face of it it can be interpreted as traders offering the precious metal higher, in the case of today’s action it was 100% due to a weak US dollar. The US dollar traded under pressure today with 4/10 of a percent and was set at 89,905 today after declining 37 points. Simple math tells us that the fall of 0.40% in the dollar is a little more than the gain of 0.16% of gold contracts today.
The same result in spot gold can be seen if you look at the KGX (Kitco Gold Index), which shows that EST spot gold was set at $ 1878.40 from 15:41, which is a net profit of $ 5.50 or +0, 29% is. Upon closer inspection, we can see that traders contributed a fractional selling pressure of about $ 1.20 per ounce. It was dollar weakness that contributed $ 6.70, resulting in today’s net profit of $ 5.50.
Many of today’s net changes in the financial markets were confused by Senator’s leader Mitch McConnell blocking Senator Chuck Schumer’s attempt to increase direct payments on the new round of fiscal stimulus from $ 600 to $ 2,000. Yesterday, the House passed a related bill to address the amount of stimulus that will be allocated through direct payments as part of the fiscal stimulus package signed by President Trump on Sunday.
On a technical basis, support for gold prices over the past three days is defined by lows within the day that came extremely close to the 50-day moving average, which is currently set at $ 1870.90. Below the 50-day moving average, the next level of support is $ 1860 and is based on a series of lows that occurred on December 22 and 23.
Resistance over the past five trading days is defined by the 100-day moving average of gold currently set at $ 1904.50. Over the past seven trading days, gold has traded to an intraday high, just below the 100-day moving average. But both efforts could not maintain a price above the 100-day moving average, let alone the price point.
Another important factor that has put pressure on gold prices in recent times has been a strong sentiment in the market where market participants prefer US equities in favor of potential returns instead of a flight to the refuge of gold. Then there is the issue of Bitcoin’s historic rise in record prices of all time capturing the capital that would have flowed into gold. Bitcoin futures (BTC F21) traded on the Chicago Mercantile Exchange earned $ 280 today and are currently set at $ 27,370 per coin. This is the highest price futures contract ever recorded for a single currency. Over the weekend, the price of Bitcoin rose more than $ 3000, causing a gap after closing on Friday and Monday morning.
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