At the beginning of a brand new trading week, gold prices are climbing higher on the back of increasing worries about a second wave of coronavirus cases globally even as the US dollar weakens and increases the demand for the precious metal. At the time of writing, GOLD is trading at a little above $1,728.

Over the previous week, gold prices registered their sharpest gains since April even as the market sentiment was boosted by developments surrounding reopening of economies around the world. However, an increase in the number of cases in the US over the last week and now in Beijing has once again driven up the safe haven appeal of gold and caused it to trade bullish.

Last week, gold had also been supported by Fed’s expectations for a slow recovery in the US economy. In a report by the Fed to the Congress, the central bank highlighted that households and businesses to experience “persistent fragilities” in their balance sheets as a result of the pandemic in the coming months, even as economic recovery begins.

Meanwhile, the demand for physical gold among the world’s largest consumers, including India and Bangladesh remains weak on account of the high prices of the yellow metal even as shops reopen after several weeks of lockdown. Bangladesh is considering removal of import taxes to spur gold buying, which could lend more support to the bullish moves in the precious metal.