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Gold Gains as Dollar Dips, Hopes For More Stimulus in US Support

Early on Monday, gold is trading bullish, enjoying support from a weakening US dollar and rising hopes for more stimulus measures in the US to offset the economic damage from the coronavirus pandemic. At the time of writing, GOLD is trading at a little above $1,873.

Late last week, US Treasury Secretary Steven Mnuchin had stated that Republican and Democrat leaders would continue their negotiations towards working out the next round of fiscal stimulus measures. His statements came after he drew flak for his announcement ending several emergency lending programs rolled out by the Fed.

Gold prices also received a boost from a weakness in the US dollar, as markets worry about a surge in fresh coronavirus cases after the Thanksgiving holiday in the US. The US dollar shares a negative correlation with the yellow metal, and whenever it weakens, it becomes more affordable for holders of other currencies to purchase gold.

Gains in gold, however, remain limited owing to a positive sentiment in markets surrounding the possible rollout of vaccines to combat COVID-19. Several news reports suggest that the US FDA and other regulatory authorities worldwide could expedite the process of approving the vaccine to combat the pandemic’s spread quickly.

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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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