Gold Price Analysis: XAU/USD refreshes weekly high above $1,780 on Biden’s ‘Joint Congress’ speech
|- Gold is on the bids and refreshes weekly top as US President Biden addresses Congress for the first time.
- Biden pushes for stimulus, sounds stronger than earlier on China, Russia.
- Risk-on mood extends amid a light calendar in Asia.
- The preliminary reading of US Q1 GDP, covid and vaccine updates are crucial.
Gold inches closer to the $1,800 threshold, refreshing weekly top to $1,788.31 by the press time of early Thursday. In doing so, the yellow metal takes the bids for the second consecutive day on the weaker US dollar. Recently propelling the commodity prices are the comments from US President Joe Biden.
Biden urges Congress for more stimulus, stands tough on China, Russia…
In addition to the $15 an hour minimum wage, US President Biden also urged policymakers to let the 1% wealthiest Americans pay for the stimulus.
The Democratic Party member also said that he told Chinese President Xi Jinping that the US will maintain a strong military presence in indo-pacific, as it does with NATO in Europe. Biden also mentioned to have “Made clear to Russian President Vladimir Putin that us does not seek escalation, but their actions have consequences.”
On Wednesday, the US Federal Reserve (Fed) weighed on the US dollar and helped gold by turning down the tapering talk and announce status-quo monetary.
Against this backdrop, S&P 500 Futures gain half a percent whereas the US dollar index (DXY) drops to the fresh low in two months.
Looking forward, the first estimations of the US GDP will be the key, not to forget about the covid and vaccine updates.
Read: US Q1 GDP Preview: Eyes on inflation and FOMC as economic recovery gathers steam
As forecasts back upbeat US GDP, the risk-on mood can stretch and may keep fueling the gold. However, worsening virus woes in Asia and uneven vaccinations in the West may test the bulls.
Technical analysis
Gold’s sustained run-up beyond the key hurdle around $1,786-88, comprising the upper line of the stated channel and the previous support line from March, should keep gold buyers directed towards the $1,800 threshold.
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