Gold prices dip 1835! Biden's inauguration became a key guide for pigeon Yellen to continue to ferment.

With chaos and multiple risk indicators last week, gold prices ushered in pre-storm calm at the beginning of the week, with gold prices now falling below $1850 and continuing to fluctuate around $1827.30 to $1840.70. Gold buyers have benefited from the weakness of the dollar and holidays in the US market. Democratic presidential candidate Joe Biden's inauguration ceremony on January 20 will be a key guide for navigating risks, and as for the policy direction after the inauguration, Yellen, the current candidate for Treasury Secretary nominated by Biden, has made dovish remarks, which also make investors have patience to wait and see novel coronavirus's fiscal stimulus measures and future economic trends, and investors are fully preparing for a critical period.

As of 08:06 Hong Kong time before the press deadline, the price of gold fell 0.01 per cent to $1837.30. The yield on the 10-year u.s. treasury note rose 0.32% to 1.101.

Fundamental analysis: investors prepare for critical risk periods

The extended weekend holiday in the US cooled the upside for the dollar as the dollar rose to its highest level since December 21. The observation of the gold market can be attributed to caution in the run-up to the Biden administration's inauguration and continuing concerns about the COVID-19 epidemic. The market tends to be optimistic because of Chinese data and Biden's promise of a two-step novel coronavirus fiscal stimulus, thereby improving the previous uncertainty caused by US President Donald Trump and the Sino-US trade war. However, it is worth noting that the trade war between China and the United States has not stopped, and Trump recently informed Huawei's US suppliers to stop supplying goods.

Biden's novel coronavirus fiscal stimulus needs to be approved by the U.S. Senate, and that's where Yellen will play a role in his nominating team. The report said that she is expected to confirm the commitment of the United States to the market exchange rate, will show that it will not seek a weak dollar after taking office, stressed that the United States will not choose a weak currency in order to give itself a competitive advantage, and should oppose other countries to make this attempt. Us President Donald Trump has for years taken a stand against a strong dollar, saying it would give other countries a competitive advantage, while the policy outlined by Ms Yellen shows that the US will return to its traditional posture. Against this backdrop, investors are also heavily shorting the dollar, with bets on the dollar at a 10-year high, partly because of predictions that the trade and budget deficit under the new US administration will expand further.

Xin Moxiang, an analyst at Bank of Singapore (Bank Of Singapore), explained: "to some extent, Yellen shows that laissez-faire is restoring the traditional practice before Trump, and I think the dollar is likely to continue to fall. In terms of fiscal rhetoric, the dollar and financial markets will no longer be the focus of the finance minister, but the main focus will be on the implementation of financial assistance. "

Under the leadership of the lack of major risk indicators, the novel coronavirus epidemic has once again returned to the eyes of investors. Current trends show that novel coronavirus's confirmed cases in Europe, the United States, and the United Kingdom will be able to be alleviated at a later date. As novel coronavirus vaccines continue to contain highly contagious strains, the global vaccination plan is also being vigorously raised. But the global epidemic cannot be contained in a short period of time, which in turn leads to new restrictions on activity. Following the detection of confirmed cases of the variant virus, countries in Asia and the Pacific are actively planning vaccination programs, such as Japan and Malaysia, which are also implementing restrictions to prevent the epidemic from worsening ahead of the arrival of the vaccine.

Against this backdrop, the S & P 500 rose moderately, while the dollar index fell slightly. Looking ahead, the update of the secondary economy and epidemic in Asia is likely to provide more guidance to gold traders and remind investors of the need to pay attention to the ECB's monetary policy meetings ahead of important speeches by Ms Yellen and Mr Biden.