Gold Dips as Dollar Trades Strong Amid Rise in Coronavirus Cases
Gold is trading somewhat bearish, weakening on the back of a US dollar that continues to trade strong against other major currencies ahead
Early on Monday, gold is trading somewhat bearish, weakening on the back of a US dollar that continues to trade strong against other major currencies ahead of the US presidential elections. At the time of writing, GOLD is trading at a little above $1,881.
Gold shares a negative correlation with the dollar, weakening whenever the reserve currency makes gains as it becomes more expensive for holders of other currencies to purchase the yellow metal. The US dollar has been trading strong over the past few sessions amid the rising risk-off sentiment in markets due to the resurgence in coronavirus cases and announcement of fresh lockdown measures across several countries.
This risk-off mood is supporting the safe haven appeal of gold as well, limiting losses in the metal even as the dollar makes gains and trades strong. Across Europe alone, the number of new cases have doubled in a mere five weeks, driving Britain and Portugal to follow France and Germany into bringing back lockdowns.
Traders are also cautiously awaiting the results of the US presidential elections to make their next moves in gold. Latest opinion polls indicate that it could be a tightly contested election, which could send the precious metal prices soaring in the coming days.
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