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Gold prices continued their recent rally this week with the yellow metal heading back up towards the 2020 highs. The recovery in asset markets continues to support the upside in gold. Gold has now almost totally reversed the sell-off seen over March in response to the outbreak of the COVID-19 virus.
Over the last two weeks, risk appetite has stabilized. Breaking from the typical correlation seen, gold prices have been trading higher in tandem with equities markets.
The main catalyst behind the drive higher in asset markets this week was the latest announcement from the Fed. In yet a further unscheduled announcement, the US central announced a $2.3 trillion loan program. In a statement issued on Thursday, Fed Chairman Powell said:
“Our country’s highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus”.
Powell continued, saying:
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