Gold Gains as Markets Cautious About Rise in Cases, Brexit Uncertainties
Arslan Butt • 1 min read
Gold prices are on the rise in early trading on Tuesday as markets turned their attention away from vaccine optimism and towards concerns about the continued increase in fresh coronavirus cases and how it could drive governments into imposing more lockdowns and restrictions. At the time of writing, GOLD is trading at a little above $1,787.
The number of fresh infections in the US alone has crossed the 1 million mark over the past week, and the number of hospitalizations has also hit a record high in the nation. The state of California is considering announcing fresh restrictions to combat the spread of the pandemic, which could weigh on the economy – a sentiment which is supporting the safe haven appeal of gold in markets.
Gold also enjoyed support from weak economic data out of the US after a decline in the contracts to buy previously owned homes during October. In addition, factory activity across the Midwest and Texas also contracted in November, raising worries about a delay in economic recovery in the US.
Brexit-related uncertainties are also helping gold prices climb higher, with the EU looking to announce contingency measures if it is unable to work out a post-Brexit trade deal with the UK this week. According to a report on Reuters, negotiations between both sides have been quite difficult due to massive divergences on issues related to fisheries, economic fairplay and the resolution of possible disputes.