Gold Prices Edge Lower as Hopes for Fiscal Stimulus Support US Dollar

On Tuesday, gold prices have slipped 1% lower as rising hopes of economic stimulus support the US dollar, which shares a negative correlation with the precious metal. At the time of writing, GOLD is trading at a little above $1,666.

In the wake of a rise in the number of confirmed cases in the US, President Donald Trump offered some support to the economy when he stated that his government would explore ways to protect the economy from possible damage due to the virus. Expectations of fiscal stimulus measures are exerting a downward pressure on gold prices for now.

However, the safe haven appeal of gold remains supported over reigning uncertainties over the coronavirus outbreak across the world and its extent of impact on the global economy. So far, more than 110,000 cases of infection have been confirmed worldwide but on the positive side, the number of cases in China are growing at a slower pace.

Even though S&P futures also posted a slight recovery early on Tuesday, the outlook for the global economy remains bleak on account of the virus. Gold prices are expected to remain high, with some analysts expecting prices to touch $1,725 in the near future over worries that the outbreak could cause a recession in the global economy.