Gold trades back up by 0.2% in European morning trade
If the market is going to stick with the reflation trade narrative with regards to how the Georgia runoffs will conclude (Democrats likely to sweep both seats now), then there is little to suggest that the gold bet should be derailed to start the new year.
The caveat to the push higher in gold as of late is that perhaps a trigger in the bond market i.e. 1% 10-year Treasury yields could lend itself to some bids in the dollar.
However, so far the response in the greenback has been rather underwhelming.
It could still be early in the day but if the dollar bulls are disinterested even in a sharp move in yields, that bodes ill for the currency's prospects in the bigger picture this year.
There might even come a point where we may have to discuss that this may not just be a dollar decline due to a global recovery but instead, perhaps we are approaching a dollar devaluation theme when you start to piece everything together.
However, let's keep that as a another topic for another day.
For now, gold is turning back higher after a slight decline earlier on to start trading today. Price is now moving to session highs around $1,954-56 as buyers continue to take aim at the early November highs of $1,960-65.
That will mark the next key resistance region for gold as the upside momentum continues.
All things aside, gold is also playing a bit of catch-up to real yields after the November drop and that is arguably another reason to the solid gains since December:
