SMM12 March 16: due to vaccination, the stock market rose and other factors such as weak operation of the precious metal plate ushered in a rebound in the near future. The main reason for stimulating the rise in precious metals prices was that US congressional leaders said this morning that Democratic and Republican leaders had met twice to find a solution to the months-long impasse over novel coronavirus's rescue plan, and great progress had been made in the talks. By the end of the day, the main contract of Shanghai Gold rose 1.44% to 388.4.
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McConnell, the Republican majority leader in the US Senate, said negotiators had made significant progress on government funding and epidemic relief and was optimistic that an agreement would be reached soon. Gold prices have been boosted by close bipartisan consultations in Congress to reach an agreement on the first part of the $748 billion package, which is expected to be launched before the Christmas recess and market expectations that the upcoming Fed interest rate decision will be skewed towards doves.
Gold as a hedge against inflation, the market is eager for any progress on the US stimulus package, while bipartisan talks slightly raised inflation expectations, good for gold. And the Fed's decision will further revive speculative interest in gold, after data showed that massive ETF outflows hit the price of gold.
TD Securities said that the weakness in the gold market is almost over and will continue to rise next year, breaking the $2000 / oz mark.
Standard Chartered Bank said that despite short-term obstacles, gold could return to the $2000 / oz mark in the coming months. The impact of vaccines and economic recovery will not be felt until the second half of next year.
