Gold Holds Steady Amid Heightened Risk-off Mood in Markets

On Wednesday, gold prices are holding steady amid rising worries about the second wave of coronavirus, which has boosted the risk-off sentiment in markets and strengthened the US dollar as well. At the time of writing, GOLD is trading at a little above $1,726.

China has reported a more infectious outbreak of fresh cases across Beijing, while infection numbers have soared to record highs across six states in the US. Worries about a possible second wave of the pandemic has helped boost gold’s safe haven appeal.

In addition, geopolitical tensions are also on the rise in Asia – between North Korea and South Korea, as well as between India and China, which are also lending upward pressure on gold prices for now. The rising uncertainty about economic recovery and political issues has helped strengthen the demand for the yellow metal.

However, gold’s gains remain limited as a result of the US dollar also gaining strength as a safe haven currency in the wake of the heightened uncertainty in global financial markets. Gold has also come under pressure after the US reported an unexpected increase in retail sales even as promising results from drug trials for COVID-19 helped improve the risk appetite among traders.