US unemployment rate improved from 6.7% to 6.3% while corona virus cases surged ahead in last month. President Biden proposed $1.9 Trillion package and it seems he wont have any problem passing this stimulus package as democrats have good numbers now.
Last week Trump impeachment trial started which resulted in acquittal. It was not a surprise as Trump needed 2/3 majority to impeach. It seem Trump made a cult following in republican party which didn’t let him impeach second time. Now he may be able to contest for office in 2024.
Improving unemployment rate and good job numbers seems a good factor to count for gold prices now. We now have vaccine and corona virus risk seems to be minimum. Vaccine works on new strain of UK virus too. So i dont think there should be any major concern regarding corona virus lockdowns and economies. Except few European countries whole world is opening its economies and we are seeing good come back in all economies around the world. This should be sufficient to conclude that we may not see new lifetime high of gold this year.
However If some problems in vaccine or some new event occurs in world then we may see gold firing again and testing new lifetime highs.
One issue is still not clear is how world will react to its new mounting debt. Every single country had to bailout or gave stimulus package to revive its economy. Now how economies will react to this new mountain of debt will be very interesting. Many countries may raise tax or arrange some payment which could trigger uncertainty and this may result in rising gold prices. Rising debt is only reason as of now which may send gold buyers into frenzy.
Conclusion: This new year 2021 may prove to be a flat for gold traders. We may not see major movement like we seen in 2020 from 1450 to 2076$ this year. However as of now bears have everything under control.
Technically gold needs to break 1920-25$ and need to close above these levels in order to resume its bull run. A break and close below 1760-50$ may send bulls into further shock and we may see deeper cuts in gold prices.
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