Gold futures finished marginally lower and consolidated in a tight range for a third week with investors held hostage by the lack of movement toward a fresh government fiscal stimulus plan. The price action was choppy with gold rising along with hopes for a deal falling when those hopes were dashed.
It wasn’t the actual stimulus headlines that drove the price action, but what they did to the U.S. Dollar. When stimulus was on the dollar weakened, driving up foreign demand for the dollar-denominated commodity. When both sides nearly walked away from negotiations, the greenback rose, pressuring gold prices.
Last week, December Comex gold settled at $1905.20, down $1.20 or -0.6%.
Gold is viewed as a hedge against inflation and currency debasement spurred by stimulus measures. Stimulus Update It doesn’t make sense to retrace the stimulus headlines from last week. All one has to know is that they changed nearly every day […]
October 26, 2020 (updated October 26, 2020) Published by StockMan