US dollar strengthens because of the market condition which is quite gloomy. The data of employment and retail sales there are negative. That thing triggers the bad sentiment and it becomes worse because of the weekly closing.
Meanwhile, Greenback noted the substantial profit to most of its main competitors. The fact is that the concerns are triggered by the Pfizer vaccine distribution in Europe which was delayed. That really has a great impact on the market.
One of them is the concern that the pandemic will inhibit economic progress. For your information, Wall Street was closed at the red zone and the Treasury of the United States was also weakened. However, the decline was slight.
Updated USD Value in The Market
The pair of EUR / USD declined and that was under 1,2100. Meanwhile, the GBP / USD was still above 1,3600. Furthermore, the currencies related to commodity are also weakened. That happened amid the low dollar demand and equity.
On Saturday, Boris Johnson as a Prime Minister informed the steps due to the added limitation for a journey. That was started on Friday to protect his area from a risk of the new strain which is not identified yet.
It seems that England will close the entire travel corridor started from this Monday. Everyone who flies and enters that country must show the negative result of their coronavirus test. It makes sense since the positivity rate there is increasing.
Elsewhere, the gold commodity is galling since the new interest to the dollar. That commodity noted its weakest ending in a month. Now, that is in the range of $1,827.80 per troy ounce. The raw oil is also affected where WTI closed at $52,00.
Gold is Depressed Due to USD Position
The price of gold is depressed by more than 1%. That metal seems on its weekly decline and it happens twice in a row. Why? The cause is the dollar. That main currency continues to rise and overshadowing the price of that commodity.
It is an especially valuable protection from inflation because America launches more stimuli. That was stated by Joe Biden before. In the market, the spot of gold declines by about 1% and becomes $1,827.90 per ounce.
Before, it was slipped for 1,3%. It means that this commodity is still in its weekly decline. The index of the dollar is now on a track to arise. That may become the biggest one since October 2020 and can make the price of the gold bar is more expensive.
The short-term correction is triggered by two common factors. Those are the dollar power and the increase of the United State returns. The gold market is trapped between the long-term purchases behind the inflation expectation that increases because of the stimulus.
Biden Outlines The Stimulus Details
The Dollar sales have been soaring and the concerns about QE have finally materialized. The government bond yields in ten years are survived. It is getting close to the highest level in ten-month where the value was touched at the beginning of this week.
The newly elected USA President, Joe Biden, outlined the proposal about the stimulus package. The value is $1,9 trillion and that was stated on Thursday. Meanwhile, gold is known as the hedging against inflation by the market participants until now.
Furthermore, that stimulus update may make other currencies' values are declined. The increase in yields lately is like challenging that status. That situation may add the opportunity cost due to the gold bar which is not giving any results.
Technically, gold has strong support. That is for about $1.775 and declines to that level could trigger another purchase. A lot of analysts and experts agree with that thing. That is a strong possibility that may be happened in the future.
