Wednesday, October 21, 2020

Fly High Again GOLD!

 Gold prices soared on Wednesday driven by the weakness of the US dollar following rising expectations of a deal in the new US coronavirus stimulus package.

In the Asian session, yellow metal trading rose almost 0.6% to $ 1,918 an ounce, while gold futures traded higher at $ 1,923 per ounce (10.30am Malaysian time).

The greenback dollar continued to experience increasing pressure this week with trading weakening one-month lows against a basket of major currencies as positive developments on US stimulus prompted investors to turn to risky assets.

Gold, which is considered a hedge against inflation and currency depreciation, has risen 28% this year supported by massive monetary stimulus and easing measures from governments and central banks around the world.

The White House and Democrats in the U.S. Congress are reportedly close to reaching an agreement despite being stuck on issues of aid to state and local governments as well as Republican Party demands for liability protection for businesses.

House Speaker Nancy Pelosi reiterated her confidence that an agreement would be reached before the presidential election.

Aside from developments on these negotiations, gold investors will also watch the last presidential debate on Thursday to assess changes in the direction of the election.