Gold Prices Slide Down as Markets Await Restarting of Economic Activity
Gold prices are exhibiting signs of weakness early on Friday after having gained around 1.3% in the previous session following the release of the US weekly jobless claims figures showing rising levels of unemployment in the country in the wake of coronavirus. At the time of writing, GOLD is trading at a little above $1,705.
The safe haven appeal of the precious metal is on the decline for now as market sentiment improves over hopes for an easing in shutdowns worldwide as the rise in the number of cases shows signs of slowing down. However, gold prices still remain supported by fears of a deep recession in the global economy as a result of the pandemic.
Markets, however, do seem to experiencing some amount of pullback in gold prices over rising expectations of economic activity restarting soon, at least to a partial extent. On Thursday, US President Donald Trump announced his plans to restart the US economy in several phases over the upcoming weeks, boosting the risk sentiment and sending investors away from the safety of gold and towards riskier instruments.
However, analysts expect gold prices to continue their rally well into next year, supported by the extent of economic damage the virus is likely to cause across the world. Economic recovery could take longer than previously assumed even as the pandemic shows no signs of letting up so far.
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