Gold Near 2-Week High on Biden Stimulus Push, Commodities Rally By Investing.com

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By Barani Krishnan Investing.com – prices hit near two-week highs on Wednesday on stimulus plans anticipated from the Joe Biden administration and a broad commodities rally spurred by the inauguration of the 46th U.S.president. Money also flowed into the yellow metal and other haven portfolios as the dollar stalled for a third straight day, unable…

imageBy Barani Krishnan
Investing.com – prices hit near two-week highs on Wednesday on stimulus plans anticipated from the Joe Biden administration and a broad commodities rally spurred by the inauguration of the 46th U.S.president.
Money also flowed into the yellow metal and other haven portfolios as the dollar stalled for a third straight day, unable to advance after a rally over the past two weeks with few breaks that propelled the — that pits the greenback against six competing currencies — to above the key 90 level.
Part of the inflow into gold came from funds exiting bitcoin as the cryptocurrency space shuddered again at the thought of regulation — something Biden’s Treasury Secretary pick, Janet Yellen, invoked during the Senate hearing held on Tuesday to confirm her nomination.
“Bitcoin just entered the danger zone,” said Ed Moya, analyst in New York for online broker OANDA.“Demand for cryptocurrencies is plummeting as the global crypto market cap drops below the $1 trillion level.volatility is not going away anytime soon, but right now it seems the cryptoverse is in for a lot more pain in the short-term.”
But Moya also conceded that for gold’s rally to continue, Biden needs to get the first stimulus package of almost $2 trillion he announced last week as quickly as possible through the legislative hoops of the Senate, where Democrats aligned to him had a majority of just one.
“Gold is rising higher as President Biden’s first 100 days point to lots more stimulus, inflationary pressures, and a focus on jobs,” Moya said.“The dollar does not stand a chance if Biden delivers on his agenda and that should provide a strong backdrop of support for all commodities.”
on New York’s Comex settled up $26.30, or 1.4%, at $1,866.50 per ounce.
It ran up to as high as $1,870.25 during the day, cracking the key $1,868 level that had proven a stubborn resistance on multiple occasions over the past five months since gold came off the August record highs of almost $2,090.
Wednesday’s rally must have seemed surreal to the longs in gold who watched in disbelief over the past two weeks as bond yields, the dollar — and even bitcoin — benefited from all the talk about the impending U.S.stimulus, while the yellow metal itself lost 3.5%, bucking its standing as a proven hedge against inflation.
Even with the latest pop, there’s no certainty that gold is about to enter a one-way trade as bond yields could rip higher again in a market riding more on irrationality than convention.
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