Still moving back and forth around the same level throughout last week between $ 1730 - $ 1740 benchmark, the GOLDUD contract is broadly still moving on the back of the USD valuation which was busy responding to a number of important headlines from the US, and other developments in global sentiment. On a weekly basis, GOLDUD closed last week's trading session with an appreciation of 1.07% to the level of $ 1,742.80 per troy ounce.
From within the US, sentiment from the Fed is the main driver of gold prices. The Fed looks unsure about the current economic conditions and still needs further evidence for a change in the direction of its monetary policy - in the end, it is expected at least until 2023. On the other hand, with the stimulus package that the administration process is still running smoothly, the market tends to expect that economic conditions will immediately improve and this has prompted purchases of US government bonds and lowered yields.
Recent developments, the risk-off atmosphere also still gets extra strength from the combination of the global pandemic and geopolitical header. First, in the midst of expanding lockdowns in France and Germany, the European Union also still feels doubts and obstacles over the vaccine produced by AstraZeneca which weigh on restrictions on vaccine exports amid a resurgent virus and doubts over reported several significant side-effects. On the other hand, the US-China and Iran-Saudi Arabia tussle, not to mention the US vs Iran and North Korea tensions also clouded the atmosphere.
Global Economic Recovery Driving the Sentiment of Gold
Most of the countries globally are now starting to distribute the COVID-19 vaccine, has joined the US successfully approved the $1.9 trillion stimulus checks to help the economy to recovered thoroughly. This issue had become the main factor for the gold to be kept moving unstable in the past weeks. In week ahead this issue may still become the major sentiment for the gold prices as no major data were going to be released this week and US’ market’s attention to Powell’s testimony.