Review of EGU Price for the Last Month
Statistics from the past 31 days showed that the EGU prices have risen by less than 1% on 13 days and increased by 1% to 2% across five days. There were 13 days where the gold prices rose beyond 2% with three days edging close to 100% and beyond. This was caused by the market volatility due to the increase in the supply of EGUs and hence, dampened demand.
Market News Recap
Due to the release of COVID-19 vaccines, the prospects of a large US fiscal stimulus and potential economic recovery continued to affect gold prices throughout December. However, US President Donald Trump’s initial reluctance to sign the stimulus bill led to uncertainty, contributing to the US dollar fall of 0.1% against a basket of currencies. This, in turn, caused gold to increase in appeal as an investment. Furthermore, the upcoming Brexit trade deal also boosted gold’s appeal.
On 27 December, Trump finally signed a USD 900 billion coronavirus fiscal stimulus package, which spurred gold prices to increase by 1% to USD 1,895.03 per ounce on 28 December. The US dollar also edged even lower, supporting gold’s appeal to other currency holders. Gold is now starting to rise steadily after facing a loss due to the optimism over the coronavirus vaccine rollouts last month.
DailyFX currency strategist, Ilya Spivak, also warns that although the passing of the US stimulus and a Brexit deal may be good news in supporting gold prices, a resurgent pandemic may drive haven-dollar buying, which may cause gold to be unstable.
Gold increased further towards the end of 2020 as investors looked past the Senate vote delay for the USD 2,000 Covid-19 stimulus checks. Moreover, the prospects of an increased fiscal stimulus caused the US dollar to fall to its lowest in two years, causing gold to rise by 0.7% to USD 1,890.61 per ounce on New Year’s Eve.
With limited availability of vaccines and a new coronavirus strain found in several countries, the economy’s recovery is still in a speculative state, which means gold will remain relatively bullish. Gold has risen by over 24% as of 2020 as it rides on the prospects of large stimulus measures and steady weakening of the US dollar.
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