FX.co ★ Gold keeps pushing for its peak

Gold prices continue to skyrocket on Tuesday morning and it has already managed to come close to its maximum levels over the past two and a half weeks. The gold was particularly supported by the news about the adoption of the financial incentive program in the US. The prospects for a final settlement of this issue are very high, which makes investors think that the inflation rate will increase significantly, which means that it is necessary to urgently look for a way to save their assets. These are traditionally through precious metals.

The price of gold futures contracts for February delivery on the trading floor in New York rose 0.44% or $8.1, which sent it to $1,874.1 per troy ounce. At the same time, the support for the precious metal was located at $1,824.8 per troy ounce, while the resistance went to $1,875.95 per troy ounce. Monday's trading session ended with a noticeable increase to $1,875.95 per troy ounce, and this is the highest value of the metal price since the end of November this year.

The price of silver futures contracts for March delivery also climbed 0.21%, which sent it to the area of $24.843 per troy ounce.

The price of copper futures contracts for March delivery, on the contrary, traded in the negative zone. A drop of about 0.39% was already recorded which sent the value at $3.4935 per pound.

The most important factor exerting pressure on market participants is the discussion about the adoption of a financial incentive program in the United States. Support for the country's economy, which has been severely affected by the consequences of the crisis associated with the coronavirus pandemic, is essential for its consistent and sustainable recovery. However, the government has not yet been able to agree on the specific terms of assistance and the total amount. Last week, it became known that both Democratic and Republican senators are considering a working version of the program with a total amount of $908 billion. This week, senators must vote to pass the existing bill or send it for revision. However, it has already been decided to accept temporary funding. It will allow us to work more carefully on the main points of the main program, which will be ratified later, especially since the scale of the COVID-19 pandemic is still impossible to fully understand, and the epidemiological situation is far from ideal.

The safe haven of gold is the most convenient and traditional means of protection against inflation spikes, which cannot be avoided in the light of recent events. An incentive package can only exacerbate an already tense situation. Moreover, the markets have already begun to actively prepare for the fact that incentives will be introduced in the near future. The main question is how much funding will be accepted. In addition, an important factor is the timing of its appearance, which directly affects possible jumps in inflation. In any case, the precious metal markets look more stable against this background, which makes investors actively return to them.