25.01.202117:03 Forex-elemzések és áttekintések: Gold exhibits uncertain dynamics

Prices on the precious metals market showed weak dynamics on Monday morning. Market participants are focused on the decision of the US government regarding a new, more expanded package of financial incentives in the United States of America. Recall that these measures are designed to provide significant support to the country's economy, which has been seriously affected by the crisis caused by the coronavirus pandemic.

The price of gold futures contracts for February delivery on the trading floor in New York sank 0.11% or $2.1, to $1,854.1 per troy ounce. However, it should be noted that the downward trend is so weak that it is unlikely to continue shortly.

Silver futures for March delivery, by contrast, gained 0.38%, pushing them to $25.652 per troy ounce.

Investors do not yet understand how realistic a positive decision on the issue of a new incentive program is, and it is on this that the further movement of the value of precious metals depends for the most part. Recall that if all goes well, the ratification will be subject to a package of financial assistance amounting to $1.9 trillion, proposed by the current US leader Joe Biden even before his official inauguration.

Traditionally, gold is perceived as the main and most affordable way to protect against too high inflation. And it will be inevitable against the backdrop of such a soft US financial policy. Moreover, the stimulus package will negatively affect the rate of the US dollar, which is still experiencing problems, and later will generally come under enormous pressure. However, this can be a significant supporting factor for metals. Nevertheless, so far this is not too strongly reflected in the precious metals market, which react very cautiously to all current changes in the dollar.

Most analysts are still inclined to believe that such a large aid package is unlikely to gain support from representatives of the Republican Party. This means that support can be accepted in a limited amount, and this is a completely different state of affairs for the precious metals market and the rate of the dollar.

At least now, a huge number of questions are already arising regarding the adoption of the stimulus package, and they need to be addressed soon. The main problem is that the Republicans no longer see the need for a large-scale cash injection, and certain points of the plan may be excluded by them. This immediately suggests that the package of measures will take even longer, as long-term disputes about it are planned.

However, there are still several reasons that can make the authorities act without undue delay. The rapid growth of coronavirus infection continues, which even mass vaccination has not yet been able to stop. All these forces us to take stricter quarantine measures that limit economic growth. This means that incentives will be needed more than ever.