Gold - Dec 15, 2020 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

International gold prices were trading higher on Tuesday morning and early afternoon trade in Asia as risk appetite waned as COVID-19 cases continued to increase which has prompted some countries to tighten restrictive measures.

Additionally, hopes are rising on both Republicans and Democrats sides that the $908 billion bipartisan proposal could be passed. Meanwhile, a $1.4 trillion spending bill for the fiscal year beginning on Oct. 1 must be passed by Friday to avoid a government shutdown.

Gold also ignored the start of COVID-19 vaccine inoculations in the U.S and Canada and the optimism surrounding the Brexit negotiations.

Meanwhile, gold also found support after the U.S. Dollar fell on Tuesday morning and early afternoon trade.

However, investor sentiments still remained fragile after holdings in the SPDR Gold Trust fell 0.4% to 1,171.32 MT on Monday ahead of the central bank meetings this week.

The U.S. Federal Reserve monetary policy will conclude on Wednesday. The Bank of England will follow on Thursday, with the Bank of Japan rounding the week off on Friday.

Technically, LBMA Gold Spot has bounced back from $1824 levels and started to trade above 21-Daily Moving Average which is placed at $1835 levels indicating an upside movement in the counter. Support is at $1834-$1825 levels.

Domestic gold prices were trading higher on Tuesday morning and early afternoon trade, tracking firm overseas prices.

Technically, MCX Gold February has bounced back from 200-Daily Moving Average at 48700 levels. However breakout above 49250 is awaited for further upside movement. It could trade in a range of 49100-49600 levels.

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Source : Equity Bulls

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