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Gold prices have moved lower with little conviction over a week of rather subdued action.
The main story this week has been the resilience in risk assets. Equities and commodities prices recovered from losses suffered last week on fears of a fresh outbreak of COVID-19.
Focus this week has been on expectations of a further fiscal stimulus package. This comes following Trump’s announcement that his team is working on a new plan, touted to include a massive $1 trillion infrastructure investment.
The rally in equities prices due to better risk environment has stifled gold prices. Despite this, however, gold prices have retained support near recent highs. Buyers stepped in at the week’s lows on Tuesday to reverse the decline.
Recent reports of increases in new infections in both the US and China present clear risks to the outlook. In addition, reports of battles between Indian and Chinese soldiers on the border this week have also raised concerns.
This means that gold is likely to reta...
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