Gold Trades Steady as Stock Market Rally Pauses in the US
Arslan Butt • 1 min read
Gold is trading cautious on Friday after gaining over 1% during the previous session amid the Wall Street rally coming to a pause and the US dollar weakening on the back of disappointing trade deficit data out of the US. At the time of writing, GOLD is trading at a little above $1,710.
The US dollar is trading close to three-month lows as traders switch towards riskier currencies over rising hopes about economic recovery resuming as countries emerge out of lockdown around the world. This has made gold more affordable and appealing to purchase for holders of non-dollar currencies, helping support gold prices even as the market sentiment improves.
Even though global equity markets have been rallying in recent weeks over optimism about economic activity restarting, analysts expect gold’s safe haven appeal to remain in focus as a correction could occur in equities shortly. Despite the improvement in overall market sentiment, the yellow metal is expected to hold at around $1,700 on average into Q3 2020 as well.
Amid continued worries about a recession in the global economy in the wake of the coronavirus crisis, gold prices are likely to remain higher with its demand as a safe haven asset expected to linger among traders in the coming months. Even though countries have eased lockdown restrictions, economic recovery could take much longer to accomplish than previously expected.