As of 3:20 PM EST gold futures basis, the most active Comex contract of February 2021, is set at $ 1,883.40 after factoring $ 3.00 (0.16%) in profits. While on the surface this could be interpreted as traders offering the bullion higher, in the case of today’s action it was 100% due to a weak US dollar. The US dollar was trading under pressure today, down 4/10 of one percent and after taking today’s decline of 37 points into account, it is currently stuck at 89,905. Simple math tells us that the dollar’s 0.40% decline is slightly more than double the 0.16% gain of gold futures today.
The same result in spot gold can be seen when looking at the KGX (Kitco Gold Index) showing that as of 3:41 PM EST spot gold was fixed at $ 1878.40, which is a net profit of $ 5.50 or + 0.29 %. On closer inspection, we can see that traders carried a fractional selling pressure of around $ 1.20 an ounce. It was the dollar’s weakness that contributed $ 6.70 and resulted in today’s net profit of $ 5.50.
Many of the current net changes in the financial markets were confused when Senator Majority Leader Mitch McConnell blocked Senator Chuck Schumer’s attempt to increase direct payments from the new round of fiscal stimulus from $ 600 to $ 2000. Yesterday, the House approved a related bill well to address the amount of stimulus measures that would be allocated through direct payments as part of the fiscal stimulus package signed by President Trump on Sunday.
On a technical basis, the support for gold prices over the past three days has been driven by intraday lows that are extraordinarily close to the 50-day moving average, which is currently set at $ 1,870.90. Below the 50-day moving average, the next support level is at USD 1860 and is based on a series of lows that occurred on December 22 and December 23.
Resistance over the past five trading days has been driven by gold’s 100-day moving average, which is currently set at $ 1904.50. In the past seven trading days, gold has traded towards an intraday high, just near the 100-day moving average twice. But on both attempts, he was unable to maintain a price above the 100-day moving average, let alone close above that price point.
Another major factor that has weighed on the gold price recently has been strong risk-in-market sentiment, with market participants preferring US stocks for potential returns rather than a flight into the safe-haven allure of gold. Then there’s the matter of Bitcoin’s historic climb to all-time record prices, capturing some of the capital that would have flowed into gold. Bitcoin futures (BTC F21) traded on the Chicago Mercantile Exchange have gained $ 280 today and are currently set at $ 27,370 per coin. This is the highest price futures ever recorded for a single coin. Over the weekend, Bitcoin’s price gained more than $ 3,000, creating a gap from the close on Friday and Monday morning.
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