Gold Traders Are looking For Clear Direction, Watch For This Two Scenario For The Bull & The Bear

Traders are still waiting for a catalyst to move this market in a big way in either direction.

Gold price are trading in a "50-50" mode, two-sided trade before moving slightly higher late in the session on Thursday. After an early surge, gold prices eased from a two-week high as investors booked some profit following an upside spike the previous session. Meanwhile, expectations for further stimulus and a weaker U.S. Dollar helped limit losses.

Bullish traders are betting on President Joe Biden’s $1.9 trillion dollar coronavirus stimulus package to move smoothly through Congress. They are also hoping it will trigger a resumption of the downtrend in the U.S. Dollar and increased demand for dollar-denominated gold.

Bearish traders aren’t confident in the stimulus package moving quickly through the divided Congress. Furthermore, increasing demand for riskier assets could keep a lid on prices. Rising Treasury yields could also limit any gains in gold. Yields could go up since the Treasury will have to sell more bonds to pay for the stimulus package. In order to get the money it needs, the Treasury will have to offer higher rates.