Gold prices advanced at the mid-week trading session.
Gold traders are going long as reports reveal US President Joe Biden shrugged off warnings that the economy may overheat as a result of the $1.9 trillion stimulus deal.
At the time of drafting this report, Spot gold added 0.1% to $1,840.73 an ounce in London.
The U.S president backed a proposal for quicker phase-outs of planned $1,400 stimulus checks, reducing the overall handout.
Quick Fact: It’s key to note that the precious metal typically moves in the opposite direction from the U.S dollar. Humans are emotionally and physically drawn to gold. It provides a significant store of value. Global Investors buy gold mainly to hedge against inflation.
In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi gave key insights on why gold prices are picking up gas amid the weaker dollar in play
“One week after “US exceptionalism” became the trade of the week, “USD weakness” has seemingly regained its pre-eminence.
“I would expect the US dollar sell-off to diminish somewhat today as one potential hurdle for USD bears is tonight’s US CPI. It’s a well-known fact that economist forecasts are worst at turning points because complex models need time to be tuned to handle the regime.”
Bottom Line: The precious metal is trading higher after macros revealed poor showings in Non-farm payroll at the world’s largest economy coupled with a weaker US dollar impulse.