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Gold Makes Gains After Steep Decline as Focus Turns to US Stimulus

Early on Tuesday, gold is trading somewhat bullish after seeing a sharp decline in the previous session, as traders pin their hopes on the next round of fiscal stimulus measures in the US. At the time of writing, GOLD is trading at a little above $1,880.

Gold prices saw a sharp decline of over 5% during the previous session over optimistic reports about Pfizer’s COVID-19 vaccine having an efficiency of over 90%. The news of a possible vaccine to combat the coronavirus pandemic raised the risk sentiment in global financial markets and dented the safe haven appeal of the precious metal.

However, in early trading on Tuesday, after the initial optimism surrounding a possible vaccine receded, traders turned their focus towards a likely stimulus package being announced soon in the US. Biden’s recent victory in the presidential election has raised hopes for a larger coronavirus relief package, which has boosted gold prices in turn.

In addition, Trump refuses to concede defeat to Biden, mounting legal action against vote counting in states where he lost, adding an element of uncertainty to the political situation in the US. On Monday, Trump’s campaign filed a lawsuit to block government officials from confirming Biden’s victory in Pennsylvania.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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