After days of consolidation, we saw gold prices break past the $1,800 per troy ounce level and test the highest level since 2011. However, the momentum waned near $1,830 level and price has been choppy since then.
Currently, we are in a scenario where market players are switching between US dollar on one hand and equities and commodities on another as they try to assess the impact of the virus outbreak on global economic recovery.
There is a general sense of unease due to rising virus cases globally, especially in the US which has caused countries to reimpose restrictive measures. However, at the same time, market players are hopeful that new measures may not be as stringent as imposed during the initial phase of virus outbreak.
Continuing rise in virus cases has also cast doubt about future outlook, however, market players are still expecting central bank and government stimulus measures to result in a sustained economic recovery.
The increasing tensions between US00000and China and other countries over various issues has also caused some nervousness however market players are still hopeful that tensions may not rise enough to affect the US-China trade deal.
Gold, traditionally a safe haven asset, has managed to hold firm near $1,800 despite equity markets hitting multi week highs. The major reason for this divergent trade is weakness in the US dollar as well as huge monetary inflow by central banks which is attracting investment in all asset classes. ETF buying in gold has also picked up pace amid increasing challenges to the global economy. In the first 15 days of the month of July, gold holdings with SPDR ETF have risen about 28 tonnes as against 13 tonnes in the first half of June.
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After days of consolidation, we saw gold prices break past the $1,800 per troy ounce level and test the highest level since 2011. However, the momentum waned near $1,830 level and price has been choppy since then.
Currently, we are in a scenario where market players are switching between US dollar on one hand and equities and commodities on another as they try to assess the impact of the virus outbreak on global economic recovery.
There is a general sense of unease due to rising virus cases globally, especially in the US which has caused countries to reimpose restrictive measures. However, at the same time, market players are hopeful that new measures may not be as stringent as imposed during the initial phase of virus outbreak.
Continuing rise in virus cases has also cast doubt about future outlook, however, market players are still expecting central bank and government stimulus measures to result in a sustained economic recovery.
The increasing tensions between US00000and China and other countries over various issues has also caused some nervousness however market players are still hopeful that tensions may not rise enough to affect the US-China trade deal.
Gold, traditionally a safe haven asset, has managed to hold firm near $1,800 despite equity markets hitting multi week highs. The major reason for this divergent trade is weakness in the US dollar as well as huge monetary inflow by central banks which is attracting investment in all asset classes. ETF buying in gold has also picked up pace amid increasing challenges to the global economy. In the first 15 days of the month of July, gold holdings with SPDR ETF have risen about 28 tonnes as against 13 tonnes in the first half of June.
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