Gold prices drop
|The shining metal is struggling once again to stay in positive territory. Traders are hoping that Biden’s new stimulus package will get the green light from lawmakers, and that may support the price. Gold is considered as a hedge against inflation, and that is the main play here.
For certain, the metal is likely to see much higher volatility during this week, and the event that is likely to influence the gold prices the most will be the US GDP number.
We do not see much of an upside move for the Gold prices because Pfizer has resolved its coronavirus vaccine supply issue. This means that we may see fewer challenges in achieving the main targets. As more and more people get the vaccine shot, the path to economic recovery is likely to become smooth, and that should push investors towards riskier assets, which isn’t very positive for gold price.
In terms of technical price levels, warning lights have started to flash once again as the price has broken below the 50-day SMA on the daily time frame. This was the last hope for the bulls as the gold price was already trading below the 100 and 200-day SMA on the daily time frame. We may likely see the gold price moving towards the early 1800 price level if the price fails to move above the 50-day SMA on the daily time frame.
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