Gold Makes Gains Over Weaker Dollar, Rising Hopes For US Stimulus
Gold prices are ticking higher on Wednesday, supported by a continued weakness in the US dollar even as its safe haven appeal received a
Gold prices are ticking higher on Wednesday, supported by a continued weakness in the US dollar even as its safe haven appeal received a boost on the back rising hopes for more fiscal stimulus measures to be rolled out across the US soon. At the time of writing, GOLD is trading at a little above $1,841.
As we know, gold share a negative correlation with the US dollar, strengthening whenever the greenback trades bearish. This is because a weaker dollar makes the yellow metal easier to purchase for holders of other currencies.
During the previous session, US President Joe Biden agreed to possible amendments to his proposed stimulus package worth $1.9 trillion, a move that could make it easier to pass the package and implement it soon. Whenever governments roll out more stimulus initiatives, gold’s safe haven appeal receives a boost as it is considered a hedge against inflation.
Gains in gold, however, remain limited by an improvement in the overall risk appetite in global markets, which has sent stock markets and cryptocurrencies higher. A strengthening in the US Treasury yields, with the 30-year Treasury yields briefly touching a high of 2% before easing lower, has also exerted downward pressure on the yellow metal’s prices.
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