Gold experienced a price increase on Monday morning in Asia. This is triggered by a global spike in COVID-19 cases and the possibility that more countries will impose stricter restrictions. These conditions provide a boost to safe-haven assets in the market.
Gold futures reportedly jumped as much as 1.67% to $1,926.70. The data surpassed the $1,900 figure and headed to its highest level in eight weeks. The dollar, which typically moves inversely with the commodity, showed a downward trend on Monday morning.
The holiday season showed demand for physical gold that was largely invisible throughout the top Asian regions in the previous week. The covid-19 pandemic that has not yet ended is really still having a big impact until now.
The Development of COVID Cases Globally
The COVID-19 pandemic continues to lurk in many people around the world. There are currently more than 85 million cases of COVID-19 counted as of January 4, 2021. What makes it is worse is that there are more than 20.6 million cases occur in the U.S.
Japan is also reported to have experienced a record number of COVID-19 cases over the past few days. Prime Minister Yoshihide Suga said that he would consider declaring a new state of emergency in the Tokyo area. He will always check the updates about that virus.
Suga added that the government will also resolve the extent to which an emergency declaration will soon be established. Furthermore, he will ask parliament to change the virus management law when the hearing will take place at the end of this month.
Prime Minister Boris Johnson also hinted at the possibility of tighter restrictions or lockdowns in his country. However, due to the vaccines, England will be the first country that will launch AZD1222. That is a COVID-19 vaccine developed by AstraZeneca PLC and Oxford University.
Why Was The Vaccine Chosen?
The reason is that it has been approved by the Regulatory Agency for Medicinal and Health Products on December 30. Then, it is also easier to carry around and has a low cost. In addition, its effectiveness is also good.
Elsewhere, the U.S. Federal Reserve is scheduled to release the minutes of its December meeting on Wednesday tomorrow. Investors will be looking for more details. That is about the discussions in making their forward policy guidance more explicit. The aim is to get the best one.
They will also talk about further increase opportunities in asset purchases in 2021. In addition, everyone's attention is also focused on the January 5 second-round selection in the state of Georgia to fill two Senate seats to decide which party will control the assembly.
For information, Senate Republicans have blocked a push to increase the number of COVID-19 stimulus checks from $600 to $2,000 over the past week. Later, the results will determine whether President-elect Joe Biden can push his legislative agenda that includes more stimuli.
Gold Price Update Today
Gold prices today rose more than 2% to their highest level in nearly two months. The situation was supported by a drop in the dollar ahead of the second round of elections for both U.S. Senate seats. Spot gold rose as much as 2.4% to $1,943.13 an ounce.
The highest figure of $1,944.11 was the best session since November 9. U.S. gold futures also closed up 2.7% at $1,946.60. It is possible that market participants will see the significant stimulus. That will lead to a further drop in the dollar.
The dollar index is known to slump to a 2-1/2-year low. That condition makes gold bullion cheaper for holders of other currencies. This week's Senate election could be a major event that could disrupt the dollar's strength in the global market so that gold strengthens.
