The world’s most popular precious metal soared higher at London’s trading session on Friday after an earlier pulled back the below the $1,800/oz levels as uncertainty over the world’s economy strengthened with COVID-19 cases soaring higher.
Gold traders’ earlier bearish sentiments, particularly at Asia’s trading session on Friday, came from European central banks recent calls, signaling that it may leave interest rates and stimulus unchanged in the short term.
European Central Bank President, Christine Lagarde, said at the ECB Governing Council meeting earlier this week that the European Central Bank sees monetary stimulus in Europe to be necessary for the short term fueling investor risk appetite in lieu of gold traders pulling back some of their long positions in the precious metal.
The short term threats to gold bulls remain the potential development of the COVID-19 vaccine, after it passed its first phase, triggering investors to limit their rush for safe-haven assets.
However recent statements from U.S Fed officials will certainly imply ongoing accommodative policies are on the table. Even though it seems inflation could likely rise, with global central banks printing money at a record high, the Feds will continue to be dovish in its approach, as calls for more stimulus packages certainly remain supportive for goldin the long term, going forward from am investors perspective.
In addition the, geopolitical tensions in the world’s largest economy continue to weigh on sentiment, as gold traders begin to factor a Biden presidency.
Gold prices are steadily rising as investors start to raise their stimulus expectations on coronavirus second wave fears,” said Edward Moya, senior market analyst at Oanda, in a note. “Gold is also starting to benefit from election risk, as Wall Street can’t ignore the polls anymore and is starting to price in the risk of a Biden presidency,
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