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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