Gold Under Pressure as Risk Sentiment Improves Over Hopes For Vaccine
Gold prices are trading mostly unchanged at the start of a brand new week as traders cautiously await updates from the Fed's last monetary
Gold prices are trading mostly unchanged at the start of a brand new week as traders cautiously await updates from the Fed’s last monetary policy meeting before the upcoming presidential elections. At the time of writing, GOLD is trading at a little above $1,947.
Gold has come under some pressure as the risk sentiment in markets received a boost over renewed hopes for a vaccine against coronavirus with AstraZeneca resuming its phase three trials. Also keeping gold’s gains in check are a strengthening in the US dollar, which shares a negative correlation with the yellow metal and makes it more expensive for holders of other currencies.
However, the yellow metal’s safe haven appeal gained when the ECB President Christine Lagarde called for member nations’ governments to increase fiscal stimulus to offset the economic damage from the pandemic. A rise in stimulus efforts to support recovery raises the demand for gold due to the heightened uncertainty in the economic outlook.
Gold also holds steady as consumer demand for the metal in one of the biggest markets, India, remains weak due to high prices. Physical gold dealers in the country offered discounts on purchases for the fourth consecutive week in a bid to spur demand, but most retail consumers stay away because of the sharp increase in gold rates.
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