EGU Monthly Report | Gold prices continue to be supported by weaker US dollar and decreasing yields

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 20 days and increased between 1% to 6% across ten days. There was a spike in the EGU price on 19 January where the gold prices rose beyond 13%. We attributed the result to market volatility caused by the announcement of Trading Competition Round 5, where users were likely to buy and sell their EGUs in preparation for it, and hence, creating a huge price change. 

Market News Recap
Gold got off to a great start to the new year when it rose above USD 1,900 on 4 January on the back of a weaker US dollar and declining real yields. As the month progressed, gold faced pressure from an increase in yields and a recovering dollar, but analysts still expect it to remain relatively bullish in the long term. 

Earlier in the month, gold prices were supported by expectations of a significant US fiscal stimulus and the Fed’s support for increased spending. However, as the Republicans are rooting for a smaller package, Joe Biden’s USD 1.9 trillion pandemic relief proposal may cause a fall in gold’s appeal.   

The US dollar fell drastically from a one-week high on 26 January, which raised gold’s appeal for other currency holders. On the same day, the US 10-year Treasury yields hit a near three-week low, which limited the losses for gold. Gold prices fell by 0.2% to USD 1,851.26 per ounce. 

In addition, the Feds’ Federal Open Market Committee (FMOC) meeting did not announce any new monetary stimulus measures, contributing to the decline of gold prices in the last week of January.  

Despite this downward trend, the World Gold Council (WGC) revealed that global gold demand would recover in 2021, with China’s economic recovery supporting gold’s appeal. 

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