President-elect Joe Biden’s recent stimulus package announcement may come as a surprise, but many spectators were not taken aback.
The market’s response to the $1.9 trillion monetary injection remains vague, with gold slashing and gaining after the announcement.
Earlier in the commodity charts, the bullion’s futures contracts in New York’s COMEX slashed 0.2% or $3.50 and settled at $1,851.40 per ounce.
At the end of the live stream, the contract fell further and steadied at $1,847.30 per ounce.
In a normal setting, gold futures could run to $1,857.30 per ounce with the announcement of keeping interest rates low.
Nevertheless, when traders started to churn the juices of the US leader’s decision, the yellow metal managed to gain ground.
It inched up by 0.01% to $1,851.65 per ounce, still below its previous settlement above $1,900 per ounce last week.
The lukewarm performance of gold is despite the Federal Reserve’s announcement to keep its incumbent dovish monetary policy in place.
Speaking with a Princeton University professor, the Fed’s Chairman Jerome Powell asserted that the central bank is still far from achieving its economic goals.
Thus, resulting in the decision to keep rates in the status quo and tolerance to inflation.
The precious metal is considered the best bet to hedge against inflation, especially during economic turmoil.
The bullion’s inactivity is attributed to the growing anxiety in the market due to the ascension of the US Treasury yields since last week.
Currently, the market is keeping close monitoring on the fourth-quarter GDP results to consolidate their bets.
For the record, the US economy contracted by 5% in the first quarter before falling to the pit at a 31.4% fall. It rebounded by 33.1% during the third quarter.
Copper is Still Shining
Meanwhile, copper glimmers brightly as it gets support from the weak US dollar and robust orders from the international market.
In an analysis from charts, copper price is still following the lead of the bulls since the start of the year.
Earlier in the day, it rose to an 8-year high after getting a lift from Biden’s generous stimulus package announcement.
Benchmark copper in the London Metal Exchange hiked by 0.7% to $8,065 per tonne.
It hovers just below last week’s peak at $8,238 per ounce which is the highest per tonne price notched since February of 2013.
The metal enjoyed a robust 2020, lifted by booming industrial activities in China where construction is up by 26% last year.
- Trading Instrument