Gold Steady as Safe Haven Appeal Back in Focus

Gold Steady as Safe Haven Appeal Back in Focus

Posted Tuesday, May 12, 2020 by
Arslan Butt • 1 min read

Gold prices continue to trade steady early on Tuesday even as the US dollar makes gains, supported by a deterioration in the market sentiment over fears of a second wave of coronavirus cases. At the time of writing, GOLD is trading at a little above $1,700.

Despite the strengthening in the dollar, gold’s safe haven appeal also remains intact amid the prevailing risk-off sentiment in global markets after China, South Korea and Germany reported an uptick in the number of infections after restarting economic activity. After ending the lockdown about a month ago, the epicenter of the pandemic, Wuhan, confirmed its first cluster of cases on Monday.

The US, meanwhile, is getting ready to reopen some sectors of its economy even amid fears of a resurgence in the pandemic. The US auto sector looks set to resume operations with factory workers in Michigan getting back to work as lockdown restrictions were being eased gradually.

Gold is also enjoying support over the possibility of US-China trade tensions escalating again after Chinese media reported about a possibility of renegotiating terms of the phase one trade deal. Trump, on his part, has shot down any chances of the partial trade agreement getting invalidated even as he shares his doubts about whether China has held up its commitment to the deal signed earlier this year.

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