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Gold Bullish as Dollar Weakens, Safe Haven Appeal in Focus

Gold Bullish as Dollar Weakens, Safe Haven Appeal in Focus

Posted Friday, August 21, 2020 by
Arslan Butt • 1 min read

Gold prices are trading somewhat bullish into Friday, supported by a weakness in the US dollar even as markets focus on worries about economic recovery after the coronavirus pandemic getting further delayed as cases continue to rise. At the time of writing, GOLD is trading at a little above $1,950.

A larger than expected increase in the number of Americans filing for unemployment claims over the previous week raised the safe haven appeal of gold as it points to signs of strain in the US economy even after lockdowns have been lifted. Even as the next round of fiscal stimulus measures remain unclear, a rise in unemployment levels across the US are likely to hinder economic recovery.

Gold prices also enjoyed support from a decline in US Treasury yields during the previous session. Meanwhile, the possibility of US-China tensions and even tensions brewing between the US and Iran also exert an upward pressure on the yellow metal.

Later today, gold prices could see some movement on the release of PMI figures for the current month. With markets focusing on the economic impact of the coronavirus pandemic to drive key decisions, PMI readings will especially be of interest as a key indicator of the progress towards recovery across several countries.

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