Precious metal prices exhibit weak growth on Wednesday morning. However, this can already be considered a good sign, following gold's reduction on Tuesday. Apparently, market participants do not want to take much risk ahead of the Christmas holidays, which slowly but surely returns interest in gold and other metals. In addition, the situation around the new strain of coronavirus infection remains acute, which also provides support to the precious metals market. And the long-awaited ratification of the financial stimulus package in the United States of America should be a long-term factor for gold to increase its value.
The price of gold futures contracts for February delivery on the electronic trading platform in New York rose 0.11% or $2.1, which sent it to $1,872.1 per troy ounce. At the same time, the support of the precious metal was in the area of $1,859 per troy ounce, and the resistance was $1,912 per troy ounce.
The price of silver futures contracts for delivery in March, on the contrary, fell 0.15% or $26.497 per troy ounce.
The price of copper futures contracts for March delivery increased by 0.2%. Its current level remains at $3.5202 per pound.
Over the past three trading sessions, the price of gold has been exhibiting a slow movement. Basically, there is a rather weak reduction in its positions. The most serious drop was noted on Tuesday when the precious metal parted at the end of the day with 0.7%. The US dollar, which, on the contrary, is experiencing significant difficulties on the political news of the country, keeps the metal market from excessive sagging. The value of the dollar is declining, which means that gold becomes more accessible to buy for holders of foreign currency. It is worth noting that the dollar index against a basket of six major currencies of the world became less by 0.2%.
Investors continue to monitor developments on the assistance package for the US economy. Recall that the still acting President of the United States, Donald Trump, refused to sign just a few days ago a bill passed by Congress, ratifying the amount of aid in the amount of $900 billion. He, instead, sent it for review, which made market participants nervous again. Trump's main argument is that the direct payments to taxpayers planned in the program are clearly not enough which needs to be increased significantly. It is worth noting that the Democrats are already prepared to make concessions and discuss higher payments with Trump.
Against this background, most analysts are inclined to believe that the price of gold will not be able to show significant jumps in the near future. Most likely, all movements will be extremely slow, and it is not a fact that prices will go up. It is possible that the uncertainty in the market will not be enough to send gold to new heights, especially since the holidays are ahead and activity in the markets is traditionally reduced.
Moreover, most of the uncertainty has already been played out by investors who have already come to terms with it and started acting in spite of it. The news about the coronavirus pandemic, as well as the next delay in signing the new incentive program in the US, no longer cause violent emotions.
Thus, one should not expect that there will be activity on trading floors over the next week. Already this Thursday, some markets will stop working earlier than usual and are not yet expected to open over the next few days due to the holidays. Experts say that you should not take rash steps.
