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Gold Steady as Safe Haven Appeal Supported by Risk-off Mood in Markets

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.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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