Gold Price Moves Higher on Virus Fears and Stimulus

Summary:

The gold price was higher by $13 (0.7%) on Monday as further virus fears added to the long-awaited U.S. stimulus deal of $900bn.

The gold price was higher by $13 (0.7%) on Monday as further virus fears added to the long-awaited U.S. stimulus deal. The stimulus deal has weighed on the U.S. dollar but the greenback is seeing some strength from safe-haven demand over the rise of a new strain of virus in the U.K.

The new rise of the virus in the U.K. has seen the country move into lockdown but this has also seen travel bans implemented by European Countries. There is a risk that the virus spreads into Europe, but France has banned all freight to the U.K. and this is also bringing the risk of food supply chain issues.

The U.S. stimulus deal looks to finally be approved later on Monday with a $900bn agreement between House lawmakers. The deal has been widely scrutinized over recent weeks and this is likely priced-in, whilst the threat of further lockdowns in unexpected after traders had been buoyant about vaccines emerging.

Gold Price Technical Outlook

Gold moved back above the $1860 level last week and was pressing the $1900 level. This will be the first resistance as the precious metal tries to move back to the higher levels. The 50-day moving average at $1880 will provide support for gold. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.