Gold Weakens as Markets Anticipate More Shutdowns
Gold prices suffer at the start of a brand new trading week over the increased rush for liquidity among investors as a result of mounting worries about the coronavirus pandemic and its potential economic impact as more lockdown measures are anticipated in the near future. At the time of writing, GOLD is trading at a little above $1,493.
In the previous session on Friday, gold prices had risen over 3% higher as more governments and central banks rolled out stimulus measures and reassured markets of attempts to stave off recession. However, as the number of coronavirus cases and death toll continue to rise, the risk-off sentiment is driving investors away from instruments and towards the safety of cash, causing a weakness in the prices of the yellow metal as well.
More countries are expected to announce lockdown measures in the coming days which could drive additional deterioration in economic growth worldwide. Severe travel restrictions are already in place worldwide but governments are expected to order a shutdown of workplaces and non-essential services in an attempt to contain the spread of the virus.
Gold has also been weakening over increasing strength in the US dollar in recent times, which shares a negative correlation with the precious metal. Heightened uncertainty due to the pandemic is driving investors towards the safer, more liquid dollar, which is also causing a weakness in the safe haven metal.
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