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Gold Gained 2% on Tuesday

Posted by 1st American Reserve on

Gold gained $36 (2%) on Tuesday, December 1, as a new “stimulus package” works its way through Congress. This came after gold fell by a similar amount last Friday in its first fall under $1,800 since last July. Part of the drop was technical, since many traders set “stop losses” under technical support levels like the 200-day moving average.  Since the drop happened on thin volume in the early morning hours of a post-holiday trading session with few traders present, the move was steep, and unsupported by buyers.

Usually, gold bounces back from such a move when traders return from their holiday break, and that is what happened Tuesday morning. The news media always offers some reasons for the price rise, like the stimulus package or an economic statistic or COVID news, but it’s generally just bargain hunting. They don’t usually provide analysis on why gold may have briefly fallen. 

Through Monday, for the first 11 months of 2020, gold and silver beat most stock indexes, but the tech-heavy NASDAQ index has maintained its torrid pace, up nearly 36% through November 30.  Silver and gold, however, have stayed ahead of the other major stock market indexes for the first 11 months of 2020:

 

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