GOLD PRICE, BIDEN STIMULUS PACKAGE, OPEC+ REPORT, CRUDE OIL, XAU/USD – KEY POINTS:
- Crude oil price and gold price weakened cautiously as the DXY index climbed
- XAU/USD still at risk to news Joe Biden Eyes a $2 Trillion stimulus relief
- The WTI eyes the OPEC+ monthly report after concerns regarding oversupply
The gold price weakened slightly in the past 24 hours with the DXY index gaining. The dropping of long-dated Treasury yields helped keep the losses on the anti-fiat gold from deepening after a 30-year government bond sellout. The growth associated prices of crude oil cautiously pulled back. This was in the aftermath of the commentary from Mohammad Sanusi Barkindo, OPEC Secretary-General who stated that the crude oil stocks are pretty high.
Throughout today’s Asia Pacific trade bout, the XAU/USD further extended loss after the reports crossed lines from CNN stating that people close to Joe Biden had stated that the incoming administration plans to unveil a $2 Trillion stimulus package. Essentially, this is quite high as compared to what Chuck Schumer, Senate Minority Leader was hoping for that, the Democrats had initially hoped for over $1.3 trillion during the Wall Street trading bout as Nasdaq 100 Pullback With Falling US Dollar.
On the other hand, the Treasury Yields on longer-dated end rose as the DXY index received a bid. However, this weighed heavily on the gold price and might continue in the short term amidst a larger than anticipated stimulus prospect. This package will over time have to be passed in the Senate, where the Democrats will have a very narrow majority because the current 50-50 split with Kamala Harris, the Vice President-elect acts as a tie-breaking vote.
CRUDE OIL FORECAST
Also, this might bode perfectly well for the prices of crude oil overnight. Nevertheless, we should keep a watchful eye on the OPEC monthly forecast report, particularly after the threatening warning from OPEC Director. Concerns regarding oversupply, with regards to Saudi Arabia’s unexpected planning to reduce the output, might also work against the energy prices. This is happening as the US battles with increased covid-19 cases.
GOLD TECHNICAL OUTLOOK
The gold price seems to come upon a critical support zone after the recent losses. This is a combination of 200-day SMA, the surging trend from March, and the 1818 inflection handle from June. As a result, the Trifecta would be a critical level for the XAU/USD, as the break below this level will expose the November lows seeking a better chance to pull back to the 2020 top.
CRUDE OIL TECHNICAL OUTLOOK
The prices of crude oil are hovering around the February 2020 peak after nudging over 49.42, as hoped. The bullish ‘golden cross’ seems to underpin the case of the uptrend after a 20-day Simple Moving Average crossed over 50-day SMA in November. Rising over 54.45 will expose the 20th January 2020 peak.