Gold Dips as Dollar Trades Strong, Risk Sentiment Weighs
Arslan Butt • 1 min read
Early on Thursday, gold is trading somewhat bearish, continuing the weakness from the previous session when it lost more than 1% of its value, due to a strengthening in the US dollar and the market sentiment. At the time of writing, GOLD is trading at a little above $1,869.
Stock markets continue to climb higher due to optimism surrounding a possible vaccine against COVID-19 by Pfizer. This has boosted the risk appetite in global markets and weakened the safe haven appeal of gold.
However, the precious metal enjoys support, limiting its losses due to the uncertainty around the results of the US presidential elections as Trump mounts lawsuits challenging Biden’s victory in some states. Georgia announced a decision to recount votes while Trump’s campaign filed a lawsuit in Michigan as well.
Some of the optimism around the COVID-19 vaccine has faded as the number of fresh infections continue to climb higher, lending support to gold prices. In the wake of the second wave underway, the ECB stated its intentions to implement more emergency bond purchases and issue cheaper loans to banks to offset the economic damage caused by the pandemic.