Gold Steady Above Seven-Year High Over Worries of Global Economic Recession

On Wednesday, gold prices continue to hold steady near seven-year highs over increasing fears about the coronavirus pandemic driving a deep economic recession across the world. At the time of writing, GOLD is trading at a little above $1,721.

The safe haven appeal of gold remains in the spotlight over rising fears that the global economy is going to experience a deep downturn on account of the ongoing pandemic and the resulting shutdowns. The IMF has already cautioned that the global economy could contract by as much as 3% this year, which would make it the worst financial crisis the world has seen since the Great Depression back in 1930s.

Gold prices also received an additional boost following a weakness in the US dollar after Trump hinted at restarting some economic activity in the US as soon as early May. While his statement boosted the risk sentiment in markets and drove investors away from the dollar, the yellow metal still remains in favour amid heightened uncertainty about the economic outlook worldwide.

Although Trump is keen to reopen the American economy, public health experts remain skeptical that the worst is over in the US. So far, the coronavirus has infected over Americans while the death toll has exceeded