Gold Steady as Dollar Dips, Geopolitical Tensions in Focus

Gold prices trading somewhat steady and have come under slight pressure early on Tuesday over an improvement in the market sentiment

Arslan Butt•Tuesday, May 26, 2020•1 min read

Gold Steady as Dollar Dips, Geopolitical Tensions in Focus

Gold prices trading somewhat steady and have come under slight pressure early on Tuesday over an improvement in the market sentiment, which has driven equities higher as traders look forward to economies restarting in the coming weeks. At the time of writing, GOLD is trading at a little above $1,734.

Gold prices, however, enjoyed some support from a weakening in the US dollar, which shares a negative correlation with the precious metal. A falling dollar makes gold more affordable for holders of non-dollar currencies, increasing its demand and value as a result.

Meanwhile, geopolitical tensions keep gold supported as China gets ready to impose a national security legislation on Hong Kong. The Chinese foreign ministry in Hong Kong has termed last year’s pro-democracy protests as acts of terrorism, a sentiment echoed by the security chief in Hong Kong as well.

In addition, Iran has successfully sent a second shipment of fuel to Venezuela despite US sanctions – a move which is likely to receive a response from the US government shortly. Despite optimism about economic activity restarting, gold’s safe haven appeal is likely to remain in favor in global markets amid these worries.

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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.