Gold Back to Being Bullish, Risk-off Mood Dominates
Gold prices have resumed their upward climb into Thursday after experiencing a sharp decline in the previous session as markets continue to be weighed down by worries about the economic damage due to coronavirus. At the time of writing, GOLD is trading at a little above $1,469.
The sudden rush for cash had caused gold prices to weaken by as much as 3% on Wednesday as investors sold other instruments for higher liquidity in hand due to the increased uncertainty in global markets. The sentiment turned a little better, however, when the ECB announced more stimulus measures in the form of bond purchases worth 750 billion euros.
While Australia also announced additional stimulus measures earlier today, Japan is set to follow suit soon after its inflation weakened further during February, raising the risks of a recession. Meanwhile, the US is also undertaking efforts to contain the economic damage from the pandemic by focusing on boosting medical efforts, providing paid sick leave and increasing the safety-net spending plans.
The safe haven appeal of gold is expected to remain supported over the prevailing risk-off sentiment in markets as countries the world over struggle to contain the number of infections and the death toll due to the pandemic.
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