Gold traders await more clarity on the new administration’s policies

London (Jan 20)  Both physical gold and gold futures have started the first trading day of the week with fractional gains in spot gold, and marginal gains in gold futures. Silver futures are trading respectably higher on the day, scoring the largest percentage gain of all of the precious metals.

Dollar weakness was a definitive factor in today’s gains. As of 4:11 PM EST, the U.S. dollar index is currently trading down 27 points (-0.30%) and fixed at 90.48.

Currently, February 2021 gold futures are up to $9.20 (+0.50%) and fixed at $1839.10. March Silver futures have gained approximately $0.40, fixed at $25.26. Spot gold had fractional gains of $2.00 which was due to dollar weakness overcoming the selling pressure.

President-elect Joe Biden has just arrived at Joint Base Andrews, as he prepares to be sworn in as the 46th president of the United States. This new administration will bring forth a completely different set of policies, and market participants will focus intently on his proposals to rebuild our economy and eradicate Covid –19.

Expectations are that he will greatly increase fiscal stimulus and continue as long as needed. He has already proposed a $1.9 trillion package. While fiscal aid is proposed is essential for the economy. At the same time, we are aware that the more fiscal stimulus that is allocated the greater the United States digs deeper into debt.

The Fed has stated they will be maintaining the current highly accommodative monetary policy, which includes quantitative easing and the purchase of approximately $120 billion of assets a month in which they will add to their current balance sheet.

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