Gold’s Safe Haven Gains Under Pressure as Dollar Strengthens
Arslan Butt • 1 min read
Gold prices are trading somewhat bearish on Friday, pressured by a stronger dollar amid expectations of a delay in the next round of fiscal stimulus in the US. At the time of writing, GOLD is trading at a little above $1,906.
So far this month, gold has failed to make strong moves, trading in a range due to the heightened uncertainty about the announcement of the coronavirus relief package before the presidential elections on November 3. While the safe haven metal remains supported by a resurgence in cases across Europe and some parts of the US, the recent gains in the dollar are keeping its bullishness in check.
The release of the latest weekly jobless claims report during the previous session revealed a sudden spike in the number of people claiming unemployment benefits in the US, raising fears about the impact of the pandemic on the country’s labor market. Gold prices also enjoy support from a spike in cases in Europe and Britain, which has driven both regions to announce fresh restrictions and curfews to contain the spread of the virus once again.
Markets are worried about the economic impact of the fresh restrictions on the European and British economy, even as both regions are yet to recover from the damage caused by the first round of lockdowns. Concerns about the economic fallout from the pandemic is expected to keep gold supported in the near future, although gains in the dollar as a safe haven currency could keep prices from rising too high.