Gold Dips But Remains Supported Over Economic Recovery Fears

Gold prices have eased slightly lower on account of recent gains in the US dollar; however, they remain supported over continued concerns

Arslan Butt•Tuesday, September 8, 2020•1 min read

Gold Dips But Remains Supported Over Economic Recovery Fears

On Tuesday, gold prices have eased slightly lower on account of recent gains in the US dollar; however, they remain supported over continued concerns about economic recovery in the wake of the coronavirus crisis. At the time of writing, GOLD is trading at a little above $1.925.

In the previous session, the US dollar gained around 0.2% against its major peers, sending gold weaker. Gold shares a negative correlation with the dollar, and weakens whenever the currency gains as it makes the yellow metal more expensive for holders of other currencies to purchase.

However, gold remains supported and losses remain limited as a result of reigning worries about economic recovery post the pandemic. GDP data released from Japan earlier today revealed a greater than expected contraction in its economy during Q2 2020, while German industrial output grew at a slower than forecast pace, spelling trouble for Eurozone’s largest economy.

In addition, US-China tensions also keep gold prices supported after US President Donald Trump once again broached the idea of decoupling both countries’ economies. Recent reports on the New York Times also suggest that trade tensions could build up again as the US is considering a ban on cotton produced by the Xinjiang region in China over alleged human rights violations.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.