Gold’s Safe Haven Appeal Supported by Rise in Fresh Cases, Restrictions
Arslan Butt • 1 min read
Gold is trading bullish in early trading on Wednesday as the US dollar turns weaker even as a continued surge in fresh coronavirus infections and deaths supports the safe haven appeal of the yellow metal. At the time of writing, GOLD is trading at a little above $1,858.
A decline in the benchmark 1o-year US Treasury yields drove the US dollar to slide lower, helping support the precious metal’s demand. As we know, gold shares a negative correlation with the dollar, as a weaker dollar makes it more affordable for holders of other currencies to purchase the safe haven asset.
Meanwhile, the ongoing spike in fresh cases across Asia, Europe and even the US have markets worried about the economic impact of the pandemic all over again. Many countries in Europe and Asia have announced fresh restrictions in an attempt to contain the spread of the pandemic, heightening worries of further economic downturn as a result.
Gold also enjoys support over political uncertainty in the US as the House of Representatives gets ready to vote on impeachment proceedings against President Donald Trump. Leaders in the US have called for Trump’s impeachment after he allegedly incited his supporters to hold violent protests at the Capitol during the confirmation of Joe Biden as the next president.