Gold Weakens as Prospects of Economic Recovery Rise - Forex News by FX Leaders
Gold Weakens as Prospects of Economic Recovery Rise

Gold Weakens as Prospects of Economic Recovery Rise

Posted Wednesday, March 31, 2021 by
Arslan Butt • 1 min read

Early on Wednesday, the safe haven appeal of gold is waning following the release of a stronger than forecast industrial output reading from China even as US Treasury yields continue to strengthen and exert downward pressure on the yellow metal. At the time of writing, GOLD is trading at a little above $1,683.

Recent economic data releases from two of the most important economies worldwide – the US and China, are showing promising signs of recovery in the wake of the coronavirus crisis, causing gold to trade under pressure. While in the previous session, the US consumer confidence soared to a one-year high for the month of March, manufacturing and services activities across China also grew at a faster than expected pace, driving hopes for rapid economic recovery.

Gold is also trading bearish after recent comments from Fed officials point to the US economy and employment levels expected to post a sharp rebound by this summer. Thanks to President Biden’s assurances of a faster rollout of COVID-19 vaccines, 90% of adult Americans are expected to be eligible for the shot against the virus within a few weeks.

The safe haven metal slid further after the IMF planned to upgrade its global economic growth forecasts for the current year. Managing director at the IMF, Kristalina Georgieva, confirmed that following the 3.5% contraction in 2020, the global economy is expected to grow sharply through 2021 and into the next year as well.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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