Gold prices rose on Monday, standing firm above the major level of $1,800 per ounce, as increasing COVID-19 cases across the world, as well as a weaker dollar, underpinned the safe-haven metal.
Gold futures increased by 0.52% at $1,811.52 per ounce by 08.21GMT while the U.S dollar index that tracks the greenback against major currencies fell by 0.2%, making gold less expensive for holders of other currencies.
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Stephen Innes, chief market strategist at financial services firm AxiCorp explained that “The COVID-19 narrative is not going away and we don’t think the U.S. Federal Reserve is going to change course on the rates anytime soon, which should support gold prices. The medium-term outlook for the economic recovery still looks very uncertain and this continues to provide ample room for gold to float higher.”
Over 12.83 million people have reportedly been infected by the pandemic globally and 565,626 people have also died. COVID-19 cases in the U.S. have continually increased as well; Florida reported a record increase of more than 15,000 new cases within 24 hours on Sunday.
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Reuters’ technical analyst, Wang Tao, explained that spot gold still targets $1,831, as it has broken a resistance at $1,796 per ounce.
Further worsening the economic worries, U.S. President Donald Trump on Friday mentioned that he was not currently thinking about negotiating a “Phase 2” trade deal with China. With gold being a safe-haven asset particularly to mitigate risks of economic uncertainty, investors and speculators have increased their bullish positions on it, causing the price to rise.