Gold Gains as Investors Reacted to a Newly Identified Variant in South Africa

  • Commodities Analysis

Gold yesterday settled up by 0.39% at 47960 as investors reacted to a newly identified coronavirus variant spreading in South Africa by piling into safe-haven assets. The variant was considered by scientists to be the most significant yet found, Britain said, adding that authorities needed to ascertain whether or not it rendered vaccines ineffective. ECB policymakers Ignazio Visco and Luis de Guindos said the eurozone economy was still rebounding but the pandemic was once again a source of worry. The central bank is still on course to end its Pandemic Emergency Purchase Programme in March, ECB vice-president de Guindos said.  
 
ECB President Christine Lagarde was quoted as saying to a German daily that the central bank expected inflation to fall from January. Physical gold demand picked up in major Asian hubs this week helped by a retreat in prices, with dealers in India prepared for a likely spurt in buying as the wedding season gathers pace. Dealers offered discounts of up to $1 an ounce over official domestic prices down from the prior week's $2 discounts. Chinese customers were charged premiums of $4-$5 an ounce over benchmark spot prices, versus last week's $1-$4. The country's monthly net gold imports via Hong Kong jumped 56% in October to the highest since June 2018.  
 
Technically market is under fresh buying as the market has witnessed a gain in open interest by 5.3% to settled at 9339 while prices up 186 rupees, now Gold is getting support at 47712 and below same could see a test of 47464 levels, and resistance is now likely to be seen at 48404, a move above could see prices testing 48848. 

Trading Ideas:
# Gold trading range for the day is 47464-48848.
# Gold gains as investors reacted to a newly identified coronavirus variant spreading in South Africa by piling into safe-haven assets.
# ECB policymakers Ignazio Visco and Luis de Guindos said the eurozone economy was still rebounding but the pandemic was once again a source of worry.
# ECB President Christine Lagarde was quoted as saying to a German daily that the central bank expected inflation to fall from January.

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