Gold Surges $30 as Biden Sworn In as US President

WikiFX News (21 Jan.) - The gold market saw a V-shaped rally on Wednesday as Joe Biden was being sworn in as 46th president of the United States. Spot gold rebounded to $1,850/ounce from $1,832.30, after touching a high of $1,860.

“Much of today's rally is just investors believing that you are going to see the Biden administration work nicely with the Treasury in providing a significant amount of stimulus in the first 100 days,” said Edward Moya, senior market analyst at OANDA .

“The $1,900 level is likely to be short-term resistance this week, and if the rally continues to see strong support, I wouldn't be surprised to see gold at $1,950 by the middle of next month,” Moya added.

Meanwhile, there is still a lot of uncertainty when it comes to the vaccine rollout, growing case numbers, and new virus variants.

“One of the concerns is that the South African virus strain would potentially become a big problem. The worry is that the mutation is resistant to anti-body neutralization, which means that vaccines might not be able to protect from re-infection,” Moya noted. “This raises expectations that we are going to see lockdowns a lot longer, and it will force more fiscal efforts, which will be the backbone for gold prices.”

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Chart: Trends of Gold