Gold prices continues to recover from its 8-week low due to the US stimulus

Mohammed Abdelkhalik
February 8, 2021
gold prices

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Gold Prices Outlook – 8th February 2021

Updated on [lmt-site-modified-info]

Gold prices rose during today’s trading session, Monday, February 8th, in the European market, to maintain its gains for the second consecutive session. This rise came within the continuation of recovery operations from the lowest level in 8 weeks and recorded earlier in trading, to trade again above the important psychological barrier of $1800 an ounce. While weak US jobs data strengthened hopes again for more fiscal stimulus in the United States and put pressure on the dollar.

Gold prices rose by about 0.4% until 09:25 GMT, trading the price of an ounce around the level of 1823.09 US dollars.  From today’s session opening level at 1815.78 dollars and reached early in the session the lowest price at 1807.81 dollars per ounce.

XAUUSD Chart- 8th february 2021

Gold prices rise with the decline of the US dollar

In terms of trading on Friday, the precious metal “gold” managed to end the session, up by 1.1%, to record its first daily gains during the last four sessions. This rise came within the recovery processes from the lowest level in eight weeks at $1784.94 an ounce, as prices received some. Furthermore, supported by the decline in dollar levels after disappointing jobs data in the United States.

But over the past week’s trading, prices lost 1.8% in the second consecutive weekly loss, with investors ’focus shifting to buying the dollar as the best alternative investment against a number of major and minor currencies.

Other than that, and what provided more support to prices today, renewed investor demand activity for the safe-haven metal, especially in light of the growing doubts about the US economic recovery, “the largest economy in the world,” after weak jobs data released on Friday.

The US Department of Labour announced the addition of the US economy to 49 thousand jobs during the month of January, compared to expectations that indicated the addition of 50 thousand jobs during the same month. The unemployment rate in the United States decreased to 6.3% during January from 6.7% in last December, while analysts expected index stability unchanged.

For his part, US President “Joe Biden” commented on these data, saying that American citizens are suffering and this matter must be addressed.

US Treasury Secretary “Janet Yellen,” said on Sunday that the economy may return to full employment by 2022 if there is a big stimulus package to support the economy.

America’s stimulus package

The new US administration led by President-elect “Joe Biden”, in cooperation with Congress, is working to pump more economic stimulus in the country, with the aim of quickly overcoming the negative repercussions resulting from the Coronavirus crisis.

And media outlets reported that the Senate approved President Biden’s $1.9 trillion economic stimulus plan.

Author Mohammed Abdelkhalik

Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.