In the past week, the most important factor in the rise of gold was the words of Jerome Powell after the last meeting of the Federal Reserve this year; The governor of the US Federal Reserve assured that until the US labor market is stable, the agency will continue its program of buying assets and supporting the US economy.

A backup called the Federal Reserve

In his speech, Jerome Powell stressed that the Federal Reserve will use the utmost flexibility to adapt to economic conditions. Analysts still think the $ 1925 gold target for Christmas is still available. “Powell’s remarks made it very clear that central bank officials continue to do their utmost to support the economy and that contractionary measures are not expected to be available until at least 2023,” said Peter Haag, director of global trade at Kitco. This means that the Federal Reserve’s expansionary policies, as well as its floating inflation targeting, will last for the next two years. Hogg is very optimistic about the gold price trend, at least until the global economy returns to normal, around the third quarter of 2021. He added that in terms of monetary policy, as well as from the perspective of central banks, everything is in line with gold; Policies that will widen the deficit and weaken the dollar, which will keep gold in good shape.

The two main factors in the last week of 2020

For next week, the last trading day of 2020, two main factors can be attributed to the fluctuations in the value of the yellow metal. In general, investors are looking for two important events in the last days of the year; Two events that can have a significant impact on markets. Investors will be following European politicians’ discussions on the Brexit trade deal in the first place, and on another continent they will be following the latest state of negotiations in Congress for a new stimulus package. Representatives of both parties in the United States have a short time to agree on a $ 908 billion package to support the US economy before the end of this year. In any case, it will be known by the end of next week whether the new financial package will be approved or not. However, analysts believe that the markets have been counting on the $ 900 billion financial package for weeks, and that disagreement in Congress and its non-approval could reverse market conditions. On the issue of choice, political analysts now estimate that the chances of Britain leaving the EU without a trade agreement are more than 50%; If that were to happen, it would certainly be good news for precious metals such as gold. The lack of a trade agreement between the UK and the EU will increase market concerns and uncertainty, and this has always been in favor of gold.

The biggest resistance before reaching the price of $ 1925 is crossing the $ 1900 border. On the other hand, technical market analysts believe that in the optimistic state, the $ 1850 border in the coming week will have strong support for gold. However, a Kitco poll shows that both mini-street traders and Wall Street experts strongly agree on a rise in gold prices for next week. 79% of analysts and 75% of market traders who took part in this week’s Kitco poll also believe that gold will rise in the last days of 2020.

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