Gold prices remain mostly unchanged and are trading somewhat steady on Friday as market sentiment continues to be dominated by worries about a second wave of coronavirus, which has spurred the safe haven appeal of both the yellow metal as well as the US dollar. At the time of writing, GOLD is trading at a little above $1,725.
The number of fresh cases in Beijing and other parts of the country continue to rise even as China imposed fresh lockdowns in Beijing. Even some US states have observed an uptick in the number of infections and hospitalizations over the past few days, raising fears of a second wave even as the economy reopens.
Gold’s safe haven appeal received further support from comments by the Cleveland Fed President, Loretta Mester, who estimated that it could take 1-2 years for the US economy to return to pre-pandemic levels of growth. Meanwhile, unemployment claims in the US declined for the 11th consecutive week even though the recovery in the country’s labor market appears to have reached a point of stagnation for now.
Geopolitical tensions in Asia are also driving a risk-off mood in global markets and supporting gold prices for now. In addition, tensions between the US and China are back in focus after Trump threatened to cut ties and even consider decoupling the countries’ economies.