Gold price weakened has weakened from $1959 below $1800 since the beginning of January, and the current price stands around $1823. The global business activity is still under pressure, and as long the price is above $1800 support, there is no risk of the bear market.
Fundamental analysis: Risk aversion will likely prevail in the upcoming weeks
Gold price extended its correction from its highs registered in the first week of January, but despite this, gold price remains in an uptrend according to technical analysis. Increasing vaccinations keep financial markets in a positive mood, but there is still a long way to go before widespread vaccination.
According to analysts, the global economy is expected to reach pre-COVID-19 levels within a year, but the risk aversion will probably prevail in the upcoming months. The U.S. Federal Reserve will support the economy for as long as needed and keep interest rates at low levels, which is positive news for gold prices.
The U.S. Federal Reserve chief Jerome Powell said that the real unemployment rate is probably closer to 10% than the 6.3%, which added a pitch of pessimism to financial markets.
The U.S. stock market is still supported by the fact that investors remain optimistic about the large U.S. stimulus package. The U.S. House Speaker Nancy Pelosi said last week that she hopes that Joe Biden’s COVID-19 relief plan could be approved by the end of February.
This Saturday, the White House asked China to make available data from the earliest days of the Covid-19 outbreak. China refused to give raw data on early COVID-19 cases to the WHO-led team, and it should make available its data from the earliest days of the pandemic. According to White House national
