Gold prices trading sideways as ECB fails to offer new stimulus cues
- Spot gold prices are trading 0.2% higher to $1,944.27 per ounce today
- The European Central Bank (ECB) failed to provide any specific indication on further stimulus
- The U.S. Senate blocked a Republican bill that add about $300 billion in further coronavirus stimulus
Gold (XAU/USD) prices have continued to trade mostly sideways in the past week after the European Central Bank (ECB) failed to provide any specific indication on further stimulus.
Fundamental analysis: ECB offers no clues
Spot gold prices are trading 0.2% higher to $1,944.27 per ounce today as the sideways action in the market continues.
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“The ECB did not address the stronger euro, neither did it come up with any stimulus plans, which will keep inflation in check in the eurozone. That’s negative for gold,” Peter Fertig, analyst at Quantitative Commodity Research said.
Christine Lagarde, President of the European Central Bank, downplayed the rising concerns about the Euro and further stimulus. In the United States, the U.S. Senate blocked a Republican bill that would have delivered about $300 billion in further coronavirus stimulus.
According to the economic determinants, the recovery process from the coronavirus is going to be long and challenging, particularly in the labour sector. U.S. consumer prices rose more than anticipated last month, per the latest data.
“While COVID-19 vaccine developments and improving economic data present near-term headwinds to gold, low and negative interest rates, a weaker USD, and expectations for further stimulus keep the balance of risks to the upside,” Standard Chartered analysts wrote in a note.
The U.K. economy recorded growth for a third successive month following the reopening of certain sectors after the lockdown, however, it’s still 12% down compared to its level before the pandemic.
Technical analysis: More sideways action
From the technical perspective, not much has changed for gold prices. The price action is still stuck around $1,950/ounce as the buyers look tired and sluggish. In the past two weeks, two failed attempts to move north of this level were registered.
Gold prices are now trading in a symmetrical triangle as the price action created the series of the lower highs and higher lows. Intraweekly resistance comes at $1,970/ounce, while support comes between $1,900 – $1,920, for investors looking to trade gold.
Gold prices are trading sideways after the ECB failed to offer new clues and indications of a new coronavirus stimulus. Spot gold prices are trading 0.2% higher to $1,944.27 per ounce today.
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