Gold’s Safe Haven Appeal Supported, Delay in Economic Recovery Expected
The safe haven appeal of gold remains in focus, helping prices climb higher over renewed worries about a delay in economic recovery after
Early on Monday, the safe haven appeal of gold remains in focus, helping prices climb higher over renewed worries about a delay in economic recovery after the coronavirus pandemic. At the time of writing, GOLD is trading at a little above $1,934.
While the NFP report which released on Friday showed an improvement in the jobless rate during August, the number of new jobs being created slowed down as well, indicating that economic recovery could take longer in the US. The Fed has already signaled its intentions to continue with low interest rates for an extended period of time, another factor that is supporting gold prices lately.
Markets expect other leading central banks to follow in the Fed’s footsteps and remain dovish for a longer period of time as the pandemic still rages on even as economies reopen around the world. Traders expect more stimulus measures to be rolled out by both central banks as well as governments as the pandemic-driven downturn extends into the current quarter as well.
However, gold’s gains remain under pressure as the US dollar trades steady close to a weekly high. Gold shares a negative correlation with the dollar, as a stronger dollar makes the yellow metal more expensive for holders of other currencies.
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