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High Uncertainty in Markets Drives Gold Weaker as Traders Seek Liquidity

The safe haven asset gold is trading weaker early on Thursday as investors focused on raising liquidity even as the US government gets ready to announce its fiscal stimulus package to offset some weakness in the economy. At the time of writing, GOLD is trading at a little above $1,605.

Markets continue to focus on the rising uncertainty being driven due to escalating concerns about the coronavirus pandemic and its economic fallout. The risks of a global economic recession are on the rise following the release of disappointing economic data in recent times.

Core durable goods orders in US witnessed an unexpected increse during February, but point to an impending reduction in business investment, which could fuel further strain in the economy. Meanwhile, several officials have cautioned that the global economy could experience a recession which would be more severe than the one seen during the 2008-09 financial crisis, further raising tensions in the market.

While gold is conventionally looked upon as a safe haven asset that traders turn to in times of uncertainty, the high volatility has driven investors to turn away from other instruments and towards the safety of cash, causing weakness in the yellow metal instead.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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