Gold Dips Close to One-Month Low - Delay in US Stimulus Weighs

Gold Dips Close to One-Month Low – Delay in US Stimulus Weighs

Posted Friday, October 30, 2020 by
Arslan Butt • 1 min read

Gold prices continue to trade close to the lowest levels in a month early on Friday, as the US dollar continues to trade strong amid a likely delay in the announcement of more fiscal stimulus for the US economy. At the time of writing, GOLD is trading at a little above $1,875.

The US dollar has risen close to a one-month high, buoyed by statements that the coronavirus relief package would get delayed until after the presidential election. Gold shares a negative correlation with the dollar, weakening whenever the currency turns bullish as it becomes more expensive for holders of other currencies to purchase the safe haven metal.

Gold also dipped lower after the release of a better than expected GDP reading in the US for the third quarter of the year. The US economy grew by a record 33.1% YoY in Q3, rebounding after the sharp decline in the previous quarter due to the coronavirus pandemic driven shutdowns.

Gold prices enjoy support from the ECB’s comments about unleashing more support for the Eurozone economy in December, amid a resurgence in cases. Markets are expecting the central bank to roll out more bond purchases or offer cheap credit for banks to spur lending.

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