On Wednesday, gold is gaining strength and trading bullish as markets worry about the fresh economic damage the second wave of the coronavirus pandemic could cause, even as optimism about vaccines fades and weakens the risk appetite. At the time of writing, GOLD is trading at a little above $1,880.

During the previous session, Fed Chair Jerome Powell highlighted that the economic damage from the pandemic in the US required more stimulus measures to offset and that economic recovery could still take considerable time. Powell’s statements served to heighten the safe haven appeal of gold, and weak economic data releases from the US lent additional support to his sentiment.

The risk sentiment was further weakened by ECB President Christine Lagarde’s statements about how the news of a vaccine was not going to change economic projections by the central bank. This statement was also on the lines of Powell’s latest remarks that even with a vaccine, economic recovery could take more time than previously anticipated.

Gold prices also enjoyed support from UK PM Boris Johnson’s latest remarks highlighting uncertainty about a post-Brexit trade deal between the EU and Britain. According to Johnson, there was still no confirmation on whether both sides would finalize a trade agreement but he insisted that Britain would thrive whether or not such a deal was put in place, once again raising the possibility of a no-deal Brexit.