Rise in Cases, Weak Data From US Support Gold Prices
Arslan Butt • 1 min read
Early on Thursday, gold is trading somewhat bullish as the US dollar experiences weakness on the back of disappointing economic data and a continued increase in the number of fresh coronavirus infections across the country. At the time of writing, GOLD is trading at a little above $1,809.
Unemployment claims in the US increased for the second straight week, as per the report which released in the previous session, highlighting worries about the impact of the pandemic on the US labor market. In the wake of the current second wave underway, an increase in people filing for unemployment benefits raises fears about economic recovery being further delayed across the US.
Gains in gold, however, remain limited due to the overall risk-on sentiment in global markets due to reports about vaccines that can combat the pandemic. The yellow metal’s safe haven appeal has diminished significantly in recent recessions over rising hopes that the rollout of the vaccines could soon turn things around for the global economy.
Despite progress towards a vaccine, the number of new coronavirus cases is on the rise not just in the US but also across several other parts of the world, heightening the likelihood of more lockdowns and restrictions. Germany is the latest country to announce an extension of its lockdown to contain the spread of the pandemic, a move that could cause further damage to its economy.