Gold Gains as Safe Haven Appeal in Spotlight Over Second Wave Fears
Arslan Butt • 1 min read
On Friday, gold prices are trading bullish amid the prevailing risk-off sentiment in global markets over worries of an increase in the number of coronavirus cases worldwide, but are facing some pressure from a stronger US dollar. At the time of writing, GOLD is trading at a little above $1,725.
The US dollar is back in the spotlight amid fears about a second wave of coronavirus across the world as cases continue to climb higher even as economies look to restart activity across several countries. Meanwhile, global stock markets fell lower, supporting the safe haven appeal of gold over worries of how this would impact economic recovery.
Gold is expected to remain in favor as a result of the worsening economic outlook around the world. Earlier this week, the Fed cautioned that the US economy was likely to remain under strain for a longer period of time, which would force the central bank to keep interest rates close to zero into 2021 and maybe even to 2022.
This dovish sentiment from the Fed further boosted gold prices, but gains remained limited over a strengthening of the US dollar. The greenback, meanwhile, received bids as a safe haven currency amid heightened uncertainty about the global economic outlook in the wake of the ongoing coronavirus crisis.