Expect 'renewed and lasting upswing' in gold price in next few weeks: Commerzbank
(Kitco News) Gold is failing to move past the $1,900 an ounce level on a sustainable basis as strength in the U.S. dollar continues to weigh on the precious metal. However, this situation is a temporary one, with the next few weeks expected to bring new momentum into the gold space, according to Commerzbank. "The gold price is still heavily dependent on the U.S. dollar's performance. A slightly depreciating dollar lent some tailwind to the gold price yesterday, whereas a firmer U.S. currency is already weighing on gold again this morning," Commerzbank analyst Daniel Briesemann writes. "We believe that gold is well-supported and expect the next few weeks to bring a renewed and lasting upswing rather than any noticeable correction.” The rising coronavirus cases worldwide are leading to fears of new lockdowns, while vaccine progress is being delayed. "This shows that the path to developing drugs and vaccines for the virus is by no means smooth, and that quick successes – as had previously been hoped for – cannot be expected," Briesemann notes. Commerzbank sees a chance for gold to climb back to $2,000 an ounce. "Speculation has emerged that Joe Biden and the Democrats might set in motion a stimulus package worth $5 trillion if Biden were to become the next U.S. president and the Democrats were to win a majority in the Senate (they already have a majority in the House of Representatives). This would lead to another steep rise in national debt, which the U.S. Federal Reserve would presumably have to cushion with bond purchases."