On Thursday, gold prices are trading bullish and holding strong above the key level at $1,900, supported by a weakness in the US dollar even as markets worry about the economic impact of the coronavirus pandemic globally. At the time of writing, GOLD is trading at a little above $1,925.
Gold prices received a boost after the US dollar weakened against its major peers, helping the yellow metal become more affordable for holders of non-dollar denominated currencies. Additionally, a decline in US Treasury yields helped bring down the opportunity cost of holding non-interest bearing gold for investors.
The safe haven appeal of gold strengthened on the back of recent comments by Fed officials, who maintain that economic recovery in the US can only improve once the pandemic is brought under control. The US is the worst affected country in the world, with the highest number of coronavirus infections which continue to climb higher.
The precious metal also remains supported over reigning uncertainties about the coronavirus relief bill, as negotiations between Democrats and Republicans fail to yield any results so far. The delay in finalizing the next round of fiscal stimulus further impedes any scope of economic recovery in the US, preventing financial assistance to millions of Americans impacted by the pandemic.