Gold prices bounce higher, amid falling dollar
- 9th October 2020
- Posted by: Hakeem
- Category: Commodities
Gold prices rallied on Friday’s trading session, amid selling pressures witnessed on the U.S dollar Index, coupled with high hopes on the latest fiscal U.S. stimulus package coming from the world’s largest economy.
At the time of writing, the precious metal futures gained over 1% to trade at $1917/ounce, surging above the $1.900-mark.
On the political spectrum, discussions between the Speaker of the U.S House of Representatives, Nancy Pelosi, and Treasury Secretary Steven Mnuchin resumed yesterday, coupled with President Donald Trump disclosing that talks with U.S lawmakers have resumed, despite the ban he placed on the ongoing stimulus package deal before the presidential election.
In addition, Trump boosted the morale of global investors, with his latest interview talking on the high probability of reaching a consensus over the stimulus deal. For her part, Pelosi said that legislation would support the American aviation industry which had been negatively affected by the COVID-19 resurgence.
In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, spoke on the prevailing market condition boosting the yellow metal prices. He said:
“Gold is trading higher due to stimulus expectations, but the yellow metal is getting held back by the prospects of higher US yields and the Euro offering little support for Gold while trading below 1.1800.
“While the “Blue Wave” stimulus deluge is favorable for Gold, the resulting US treasury curve steepened not so much.
“The World Gold Council gave also gave the precious metal the needed boost via its statement that gold-backed, ETFs gained more than 1,000 tons of bullion worth $60 billion at current prices to their stockpiles during the first nine months of 2020, catalyzing a price rally.”