Be Watchful Ahead of U.S. Session, Gold May Face Volatility on U.S. Political Uncertainties; Jan 12, 2021

Be Watchful Ahead of U.S. Session, Gold May Face Volatility on U.S. Political Uncertainties

Today’s U.S. session will relatively be calm as few indicators are scheduled to release and that is also low Impact data. On the other side, markets keep their eye on U.S. political updates and speeches from Fed officials.

Today U.S. Vice President Mike Pence may take some severe action to remove Donald Trump from the president’s office by invoking the 25th Amendment of the Constitution. If in case, he fails to do so or delaying his action, Democrats are set to bring impeachment procedure likely on Wednesday.

On the other side, Fed officials are repeatedly giving hint on tapering of bond purchase towards the end of the year. Yesterday only Atlanta’s Raphael Bostic and Dallas’ Robert Kaplan indicated their willingness to winding down stimulus from the fourth quarter in various public appearances.

Today also during U.S. session, different FOMC members have scheduled their speeches. It will start with Bostic at 1430 GMT/2000 IST, followed by Governor Lael Brainard at 1435 GMT/2005 IST. Again Bostic is having pre scheduled speech at 1600 GMT/2130 IST, where FOMC Member Kaplan will accompany him. Lastly, Fed’s Loretta Mester and her Kansas City counterpart Esther George speak at 1700 GMT and 1800 GMT respectively.

Technical View:

XAU/USD (Gold):

Gold was trading marginally higher on Tuesday and was stabilizing around $1,863 mark till early U.S. session. All of sudden, a pair spikes down sharply to $1,842 ahead of U.S. openings. Today the pair made intraday high at $1,863 and low at $1,841 mark. A sustained close below $1,840 will check key supports like $1,832, $1,827, $1,816 and $1,807 mark respectively. Alternatively, reversal from this will tests key resistances at $1,863, $1,867, $1,876 and $1,885 mark respectively.

Take a look and do trade wisely!
Good Luck