Gold Trades Steady, Supported by Expectations of More Stimulus - Forex News by FX Leaders
Gold Trades Steady, Supported by Expectations of More Stimulus

Gold Trades Steady, Supported by Expectations of More Stimulus

Posted Thursday, August 27, 2020 by
Arslan Butt • 1 min read

Gold prices are holding steady early on Thursday after rallying more than 1% during the previous session in anticipation of Fed chair Powell’s speech revealing plans for more stimulus for the US economy. At the time of writing, GOLD is trading at a little above $1,942.

Gold also enjoys support from a weakness in the US dollar ahead of the Fed’s annual Jackson Hole symposium. The dollar has slipped to the lowest levels in nearly a week and shares a negative correlation with the yellow metal, helping it become more affordable for holders of other currencies.

The safe haven appeal of gold remains strong on the possibility of rising tensions between the US and China once again. Although both countries have agreed to work towards implementing the phase one trade deal, geopolitical tensions are building up after China fired missiles in the South China Sea even as the US imposed sanctions on Chinese companies with links to this region.

There are also expectations that the US’s coronavirus relief bill could be making some progress. According to latest reports, Republicans in the US Congress are working on a new bill that has narrower scope but will offer more stimulus support for the US economy, which is also going to keep gold prices moving upward.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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