Gold Rises as Economic Data Reveals More Economic Weakness Around the World
Gold prices are back on the bullish track after weakening by 1% in the previous trading session as traders focused on weak economic data releases from the US in the wake of the coronavirus pandemic. At the time of writing, GOLD is trading at a little above $1,690.
The markets are back to trading with a risk-off sentiment over rising worries about the economic fallout from the pandemic, which has sent equity markets lower and increased the safe haven appeal of gold. However, gains in gold remain limited as the US dollar strengthens to a multi-day high despite the disappointing private employment figures.
Gold is also enjoying support over a possible re-escalation of US-China tensions after Trump broached the possibility of more tariffs against China. Trump and other government officials are keen to blame China for the ongoing pandemic, alleging that the nation failed to warn the world about the severity of the outbreak.
Latest estimates from the European Commission see the Eurozone’s economy contracting by as much as 7.7% this year due to the pandemic. Meanwhile, inflation is likely to come down to zero even as public debt and budget deficits rise due to the several stimulus measures being announced to compensate for the possible economic damage the coronavirus crisis is likely to cause.
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