Gold Trades Steady as Positive Economic Data Releases Support Dollar, Coronavirus Fears Support
Gold is trading mostly steady following the release of better than expected economic data from the US in the previous session, even as coronavirus keeps markets under pressure. At the time of writing, GOLD is trading at a little above $1,639.
On Wednesday, the US dollar regained some of its strength after the ADP employment report revealed a bigger than expected jump in private payrolls even as the ISM non-manufacturing activity index rose to the highest level in over a year during February. As the US dollar shares a negative correlation with gold, this move helped keep the yellow metal’s prices in check.
Meanwhile, gold continues to enjoy support over the reigning uncertainty in markets about the possible economic fallout of the coronavirus outbreak as more countries around the world report an increase in the number of cases. Earlier this week, leading central banks like the Fed, RBA and BOC cut interest rates to shield their respective economies from the damage due to the outbreak, and more central banks are expected to follow suit in the coming days.
In addition, the IMF has already warned that global economic growth could worsen from 2019’s levels this year on account of the spread of the virus, adding to the risk-off sentiment in markets and aiding the safe haven appeal of gold.
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