Gold prices are holding steady in early trading on Thursday, supported by rising worries about the economic impact of a possible second wave of coronavirus across the world which has driven a risk-off sentiment in markets. At the time of writing, GOLD is trading at a little above $1,725.

While worries about how the sudden spike in the number of new coronavirus cases has worsened the risk appetite in global financial markets, gold’s gains have been limited by a strengthening in the safe haven currency, the US dollar. Gold shares a negative correlation with the dollar, and a spike in the dollar’s value makes the yellow metal more expensive especially for holders of other currencies to purchase.

Both China and the US have reported a fresh spike in the number of cases over the past few days, raising worries that as economies reopen and people get back to work, a second wave could undo any hopes of recovery and force governments to impose lockdown measures all over again. So far, China has imposed travel restrictions, shut down schools and blocked some neighborhoods to contain the fresh outbreak.

Gold is also holding steady as traders wait for the BOE’s latest monetary policy decision due later today. While the central bank is expected to keep rates steady at 0.1%, it could increase the scope of its bond purchase program to help prop up the British economy, a move that could lend support to gold prices and send them higher.