Gold is currently in a push and pull among opposing events. The new strain of the Covid-19 ignites the downward pressure. The US stimulus, in the meantime, turns out to be supportive of the price.
In the latest commodity charts, the yellow metal managed to gain by 0.5% and settled at $1,877.14 per ounce.
It further went for a bigger rally earlier in the day after it breached the $1,900 per ounce threshold before capping the day with a minimum gain.
Gold futures also followed the upward trend with a 0.14% increase.
The bullion currently trades in a contango where the futures contract for February delivery currently rests at $1,882.30 per ounce.
According to analysts, the souring appetite for riskier assets consolidated support on the precious metal’s price.
However, experts warned that bullish momentum is not yet in place due to the continued volatility in the market.
Currently, traders’ focus remains on the developments of the new coronavirus strain B.1.1.7. This strain is likely to be 70% more contagious than its predecessor.
However, experts noted that they are still looking at the matter closely that it is too early to tell whether the new variant is more deadly than its predecessor.
With this, investors are reverting once more to the protection of safe-haven assets, including the dollar and gold.
Being a non-yielding commodity, the bullion is known to be a good hedge against economic shocks, including inflation.
Despite the successive setbacks in the past weeks brought by a heightened risk sentiment due to the vaccine’s entry into force, the yellow metal is still winning so far in the year.
It managed to climb by 23% for 2020 due to the unprecedented health crisis.
Outlook on Gold and Silver Prices
With the current state of things, commodity experts noted that gold prices could still surge towards $1,900 before the end of the year.
Some are optimistic that the price could further rally to reach $1,925 per ounce.
Meanwhile, silver slipped by 1.6% today but is still trading above $25.74 per ounce.
Experts in the field noted that much of the leverage on the metal’s price is supported by robust demand for industrial metals. This is amid the economic recovery in the world’s second-leading economy.
Consequently, the robust demand for freezers boosted demand for copper and silver, which in turn became supportive of price.
The sustained growth in metal prices is also partly due to the dovish monetary policy maintained by the Federal Reserve on its final policy meeting for the year.
