Gold Weakens as US Stimulus May Take Longer to Roll Out
Gold is trading weaker on Thursday after three consecutive days of gains, as markets remain uncertain about whether the next round of fiscal stimulus measures in the US would be finalized soon. At the time of writing, GOLD is trading at a little above $1,914.
Even though both sides confirmed that discussions were making progress, US President Donald Trump and House Speaker Nancy Pelosi have raised concerned about whether it can be passed before the November 3 elections. The delay in the next round of stimulus has weakened the safe haven appeal of gold and sent prices lower.
Gold has also come under pressure as the US dollar holds steady against major rivals, as it shares a negative correlation with the reserve currency. Whenever the dollar trades strong, it makes gold more expensive for holders of other currencies, keeping its demand in check.
In addition, possible hopes for Britain and EU to make progress towards finalizing the post-Brexit trade deal soon are also reducing the appeal of gold in global markets. Both sides are expected to continue their discussions later today in hopes for working out a trade deal that will come into effect at the beginning of 2021, once the transition period for Brexit comes to an end.
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