The precious metal finished up at the last trading session but still ended with a weekly loss.
Gold prices are dropping amid the complexity seen in the U.S. COVID-19 stimulus package, coupled with the U.S dollar’s surprising gains in recent days preventing the gold bugs from extending a three-week rally.
What you must know
The precious metal had a shorter trading week as the holiday-shortened week ahead of Friday’s Christmas, printed a weekly loss of 0.3%, after gaining some $100 or 6% over three prior weeks.
- Also, the bullion tracker, better referred to as the price for spot gold, which proprietary trading firms and hedge funds use in tracking the direction for gold futures, hovered at was down 0.1% on the week.
- The yellow metal was in disarray relatively in the past week as the greenback rebounded strongly from 2-½ year lows after the British pound crumbled on fresh Brexit woes.
What you should know
Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, spoke on macros weighing hard on the precious metal prices
- “Markets had a bit of wobble on that, but my correlation matrix did not send off any SPX alarm bells just yet. However, oil is raising a few red flags. Still, with risk aversion running high, Trump’s negative stimulus footprint certainly didn’t help matters. But no one will walk away from a stimulus deal, it is all about what contours get changed. And frankly, I do not think Main Street will mind getting a $2000 surprise stocking stuffer, neither will the markets.”
By Olumide Adesina