Gold Prices Slide Lower as Dollar Strengthens, China GDP Surprises
Arslan Butt • 1 min read
At the start of a brand new week, gold prices have weakened to a six week low, as the US dollar makes gains and makes it more expensive for holders of other currencies to purchase bullion. At the time of writing, GOLD is trading at a little above $1,836.
The US dollar has risen to the highest level seen in four weeks, driving bearishness in the yellow metal. The greenback has been strengthening in recent sessions over optimism that President elect Joe Biden could roll out more stimulus initiatives to bolster economic growth in the US and offset the economic damage caused by the pandemic.
The safe haven appeal of gold has also weakened on the back of optimistic economic data releases from China earlier today. According to the National Bureau of Statistics (NBS), China’s GDP for Q4 2020 came in at +6.5% YoY, better than the previous quarter’s reading of 4.9% and beating economists’ forecasts for a 6.1% growth.
However, losses in gold remain limited as markets continue to worry about the increase in fresh coronavirus cases across the world. Despite several countries rolling out the COVID-19 vaccine, new infections are on the rise, prompting authorities to implement fresh lockdowns and restrictions that are likely to further delay economic recovery.