Gold Weakens After Gaining 1% on Monday

Gold prices are trading sightly weaker on Tuesday after gaining around 1% during the previous session on the back of a slightly stronger dollar, but remain supported by a risk-off sentiment in markets. At the time of writing, GOLD is trading at a little above $1,688.

On Monday, the safe haven appeal of gold remained in the spotlight after WTI crude oil prices fell below 0 for the first time ever as a result of rising worries about oversupply amid weakness in demand. However, on Tuesday, the yellow metal has edged lower after the US dollar found some support and made some gains as a safe haven currency.

Gold, however, is expected to face upward pressure as equities are likely to fall in reaction to the crash in crude oil prices over the day. In addition, the US government is expected to unveil additional stimulus worth $450 billion to prop up small businesses that have been impacted by the raging coronavirus pandemic, which could further boost the prices of the yellow metal.

According to a recent Reuters poll, gold prices are expected to consolidate under recent highs till 2021, amid strong appeal for safe haven assets as a result of the pandemic that could drive down consumer consumption and keep economic recovery under strain in the coming months. Meanwhile, a strengthening dollar is likely to keep prices of gold in check.

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ABOUT THE AUTHOR See More
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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