Gold Holds Steady as Hopes of Stimulus Offset Weakness in US Dollar
Gold prices continue to trade unchanged, holding close to record highs on the back of a weak US dollar even as expectations of more stimulus
Early on Thursday, gold prices continue to trade unchanged, holding close to record highs on the back of a weak US dollar even as expectations of more stimulus measures to offset economic fallout from the pandemic keep gold’s safe haven appeal in check. At the time of writing, GOLD is trading at a little above $2,049.
Gold has been boosted by the US dollar tumbling to two-year lows over worries that economic recovery in the US could take longer than previously expected as cases continue to rise in the country, prompting more lockdowns and restrictions. Meanwhile, the US bond yields’ curve steepened further, driving additional weakness in the dollar which was previously in favor as a reserve currency at the beginning of the pandemic.
Gold has gained around 34% so far this year on the back of rising uncertainties surrounding the impact of the coronavirus pandemic on the global economy and how long it would take to rebound following the ongoing crisis. Economic data from around the world continue to reflect disappointing performance even as central banks and governments unleash stimulus efforts to prop up economies.
Earlier this year, economists had anticipated economic recovery to get underway during the second half of 2020 or at least by the end of this year. However, the number of new cases and death toll continue to rise, making it highly uncertain when the global economy could rebound towards growth again.
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