Gold Supported as Uncertainties About Pandemic Continue
Arslan Butt • 1 min read
Gold prices are trading strong at the beginning of a brand new week amid uncertainties driven by the ongoing coronavirus pandemic and the upcoming presidential elections in the US. At the time of writing, GOLD is trading at a little above $1,954.
Over the previous week, gold prices strengthened by 0.5% despite trading mostly rangebound. This week’s focus shifts back to the Federal Reserve, with several officials due to speak in the coming days, including Chairman Powell’s congressional testimony. Markets could gain more insights into the US central bank’s new strategy for accommodative inflation and whether the bank will keep its monetary policy dovish for longer.
Gold is expected to remain supported amid a continued weakness in the US dollar due to the reigning uncertainties in global financial markets. Weak economic data releases from the US and a more dovish than expected Fed continue to weigh on the dollar, which shares a negative correlation with the yellow metal.
Gold is also enjoying support over fears of more lockdowns across several countries that are seeing a resurgence in cases recently. Coronavirus infections and some European cities have already started imposing fresh lockdowns, which has boosted the safe haven appeal of the precious metal.