EGU Monthly Report | Gold finds support from Federal Reserve amid COVID-19 vaccine breakthrough

Review of EGU Price for the Last Month 

Statistics from the past 30 days showed that the EGU prices have risen by less than 1% on 17 days and increased by 1% to 2% across seven days. Over four days, the price increased between 2% to 3%, while on two of the days, the prices rose by more than 3%. 

Market News Recap

The US Presidential election continues to affect gold prices. Joe Biden, the Democratic presidential candidate, won the election in the first week of November and raised the possibility of a fiscal stimulus, causing gold prices to rise. However, the reluctance of the Federal Reserve to expand stimulus programs caused a subsequent dip. With only a few working days left in December for the US government to make a decision, the effect on gold could continue to fluctuate. Michael McCarthy, the chief strategist at CMC Markets, revealed that the inability to deliver a fiscal package bolsters gold prices. 

Uncertainty surrounding the COVID-19 pandemic has also put further pressure on gold. The COVID-19 vaccine breakthrough may have caused a downtrend in gold and has potentially offset the rising gold prices from the upsurge of coronavirus infections. But gold has also found support from the Federal Reserve through low interest rates and liquidity. McCarthy warned, however, that although gold is currently supported, a stronger US dollar in the near future may push down gold prices. 

In the last week of November, the US saw gold prices fall USD 1,775 per ounce, one of the lowest since July this year. At the end of the month, it fell 1.2% to USD 1,766.26 per ounce in global markets, mainly due to the developments of the coronavirus vaccine and the potential recovery of the economy.Despite the current downward trend, though, analysts believe that gold will bounce back. A good indication is this year’s average price of USD 1,762 per ounce, which is the highest it has been since in 2011.

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