Gold prices are rising ahead of the Federal Reserve meeting

Last Updated on December 15, 2020

Gold Prices Outlook – 15th December 2020

Gold prices rose during today’s trading, Tuesday, December 15, within a range of transactions, overlooking the decline of the dollar index according to the inverse relationship between them. This increase came thanks to a relative improvement in investment demand levels for the metal as a safe haven, especially with the increase in cases of Coronavirus and the re-imposition of several European countries General isolation measures Again, this comes at a time when investors await the launch of the activities of the last meeting of the Federal Reserve Board for this year

Gold prices rose during immediate transactions by about 0.7% until 08:50 GMT, trading the price of an ounce around the level of 1839.20 US dollars per ounce from today’s session opening level at 1837.52 dollars per ounce.

While gold gained 0.6 in US futures trading, recording the level of 1843.80 dollars an ounce.

Gold prices rose after the US dollar is declining

The US dollar index fell against most of the major currencies by about 0.3% to trade around 90.7 points, compared to the opening at $ 90.05, and the highest price reached 90.9 points.

Yesterday, the index fell to 90.41 points, a level not seen since late April 2018.

The recent widespread losses in the US currency turned to increase hopes once again regarding the possibility of members of the US House of Representatives agreeing on a two-part financial stimulus package worth 1.4 trillion dollars, seeking approval.

Chart of XAUUSD - Gold Prices - 15th December 2020

Increasing numbers of COVID-19 cases and reimposing of restrictions

The World Health Organization announced in its latest report that the number of people infected with the Coronavirus has increased to nearly 11.52 million people, and 1,608,948 people have died in 220 countries around the world.

And the indications of a second wave of the outbreak of the viral pandemic continue to weigh on global markets after the United Kingdom and various regions in Europe announced a new increase in the number of people infected with the virus, which led some governments to impose a partial closure to prevent the spread of the virus.

As the British capital, London, decided to tighten restrictions on closing times for restaurants and bars, Italy announced that it was studying further restrictions during the Christmas holidays, and Germany directed to continue tightening the restrictions until January 10.

Other than that, that pandemic also caused unprecedented printing of money and a decrease in the global interest rate, which puts gold on its best general path in about ten years due to its attractiveness as the best hedge against inflation and currency depreciation.

The last Federal Reserve meeting for the year 2020

Later in the day, the activities of the last meeting of the Federal Reserve Board (the US Central Bank) for this year will be launched, to continue for two days to discuss monetary policies that suit the developments of the largest economic growth in the world.

Markets are looking forward to the FOMC meeting tomorrow, Wednesday, to get more clues about the future policies of the bank over the next three years, amid market hopes that the Fed will expand its asset purchase program.

Professional Trader and Analyst, economist in Financial and Forex marketsince 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.
Mohammed Abdelkhalik

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