Gold prices began the trading week on a fairly flat note, barely moving lower despite the continued rise in the number of COVID-19 cases around the globe.
Gold futures dropped slightly lower to trade at $1,808.65, losing about 0.07% at the time this report was drafted.
Global Investors seem to be taking a wait-and-see attitude to how global fiscal players deal with the ongoing spread of one of the worst human pandemic recorded, as well as the possible new stimulus in emerged markets.
Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics explained in detail, the macros coming from the world’s largest economy with support the price of gold above the $1,800 levels. He said:
“The University of Michigan consumer sentiment index fell in July, down 4.9pts to 73.2, which is weaker than expected amid the “widespread resurgence” of COVID-19. The outturn has unwound all of the gain seen in June for headline sentiment and takes the expectations component back towards its May low.
“When coupled with the recent stickiness of jobless claims, the Michigan survey suggests some risk that the positive data surprises that dominated through June might have hit a brick wall.”
Quick Fact: It should be noted that the precious metal typically moves in the opposite direction from global stock markets, especially the American and European stock market. Humans are emotionally and physically drawn to gold. It provides a significant store of value. Global Investors buy gold mainly to hedge against inflation.