The oil price looks optimistic. What are the reasons?
Gold edges down on stronger greenback
On Friday, gold moved lower because the week’s positive American data kept boosting optimism over the strength of the US economy and to back demand for the American currency.
In New York, April delivery gold futures tumbled 0.24%, being worth $1,242.10, the lowest outcome since March 21.
The April contract concluded Thursday’s session 0.69% lower, reaching $1,245.00 an ounce.
Futures were likely to gain support at $1,226.40, the minimum of March 21 and resistance at $1,253,60, which is Thursday’s peak.
The US dollar remained backed by a flurry of sturdy American data this week, including Thursday’s data on fourth quarter GDP as well as initial jobless claims.
The US dollar index, normally tracking the American currency’s value against a trade-weighted basket of six crucial currencies, stood still at 100.36, off a two-and-a-half week peak of 100.47 reached overnight.
A strong greenback has always weighed on gold. It’s because it dampens gold’s appeal as an alternative asset, simultaneously making dollar-priced commodities less affordable for holders of other currencies.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.