Gold prices returned to a sharp decline with losses that reached the support at $1825 an ounce before settling around $1835 an ounce at the time of writing. Losses came as optimism about the US fiscal stimulus and positive updates on the coronavirus vaccine front removed some of the shine from the yellow metal. The recovery of the US dollar also contributed to the decline in gold. The US Dollar Index rose to 91.20, gaining around 0.25%, and recovered from the recent strong weakness pushing it to its lowest level in two-and-a-half years. In the same performance, silver futures contracts ended lower at $23,990 an ounce, while copper futures for March settled at $3.5135 per pound.
Investor demand for gold has weakened slightly after the White House unveiled a $916 billion COVID-19 relief bill in a recent rush to break the months-long impasse over new aid to the coronavirus-stricken US economy. In a statement on Twitter, US Treasury Secretary Stephen Mnuchin said that he had talked about the plan with Republican leaders in addition to President Trump, and that the new proposal includes "funds for state and local governments and strong liability protection for companies, schools and universities."
Investors are currently looking forward to the European Central Bank's monetary policy meeting, scheduled for Thursday. It is widely expected that the European Central Bank will increase and expand the pandemic emergency purchasing program.
Britain has become the first Western country to start a mass vaccination campaign to combat COVID-19, while Johnson & Johnson said it expects to obtain results from its final trial of a single-dose viral vaccine in January 2021.
US employers announced there were slightly more job opportunities in October, but employment declined as the resurgence of COVID-19 continues to threaten economic recovery. The number of Americans that have been fired or laid off for the first time since June has risen. The US Labour Department reported on Wednesday that job vacancies rose to 6.65 million in October from 6.49 million in September. But employers employed 5.81 million workers, which is less than the 5.89 million employees hired in September.
In its Summary of Job Opening and Employment Turnover (JOLTS), the Ministry of Labour stated that companies and government agencies have laid off or fired 1.68 million workers, up from 1.44 million in September. The federal government's layoffs of temporary workers have contributed to the rise. The US labour market has been slowly recovering since its spring crash when the coronavirus pandemic hit the United States hard. Accordingly, employers cut 22 million jobs in March and April, and then began to call the employees who had been approved to return to work.
But the job recovery has been slowing and its recovery is now threatened by increasing cases of COVID-19.
By the end of last week, the US Labour Department reported that employers added 245,000 jobs last month, registering a sharp and steady slowdown from 4.8 million new jobs in June, 1.8 million in July, 1.5 million in August, 711,000 in September, and 610,000 in October. All in all, the US economy was still short of 9.8 million jobs in February.
Technical analysis of gold:
Despite the recent decline in the price of gold, it still has the opportunity to correct upwards. Yellow metal investors are waiting for the opportunity to retreat to have buying deals again, and the closest support levels for gold are 1822, 1815 and 1792, respectively. I still prefer to buy gold from every downside. Despite the coronavirus vaccines, there are other factors supporting gold's gains as well, such as the continued failure of the Brexit negotiations, continuing US-Chinese tensions and disagreement over European stimulus plans, among other factors. The bears will not gain control over performance without breaking below the $1800 support, otherwise the upward movement will remain strongest at the present time. Bulls' eyes are still focused on the psychological resistance at $1,900 an ounce. The performance of the US dollar, affecting the price of gold, is today awaiting the announcement of the US inflation figures and unemployment claims.