Gold Trades Cautious, Market Sentiment Still Dominated by Coronavirus Concerns
Arslan Butt • 1 min read
Gold prices are trading weaker at the beginning of a fresh trading week as the US dollar strengthens to an over four-month high over concerns about the coronavirus’s impact on global economic growth. At the time of writing, GOLD is trading at a little above $1,582.
The US dollar index, DXY, slid a tad lower after touching the highest level seen since October 8, 2019 during the previous session. The dollar shares a negative correlation with gold, and as the dollar strengthens, it becomes more expensive for buyers to invest in the precious metal.
However, gold continues to remain supported by the market sentiment which remains skewed towards the risk-off side as investors worry about the economic impact of the outbreak on China as well as on the rest of the world. Latest data from Japan shows a contraction in its GDP while Singapore has already downgraded the growth forecasts for its economy in 2020 on account of the outbreak.