As one of the main commodities, the price of gold briefly fell and moved close to the lowest level for the past two months last week. It is because market participants are looking for safer assets such as the Dollar. It arises due to the increasing cases of coronavirus.
On the other hand, uncertainty over the next U.S. stimulus to help the economy is also one of the causes. If these conditions continue to occur, then commodities will be difficult to increase. Therefore, it needs good synergy between market participants and power holders.
According to the data, the gold spot fell as much as 0.2% to $1,864.39 an ounce. On the other hand, U.S. gold futures were also down as much as 0.6% at $1,866.30 an ounce. Various parties also gave their opinions on this. This situation will be monitored.
Stimulus Uncertainty is One of the Causes
Republicans and Democrats are in the same position on how to put some stimulus. However, they cannot decide the amount of it. This triggered uncertainty that pushed investors against the dollar. It is what Edward Moya, senior market analyst at OANDA in New York, said.
For the previous week, gold was down about 4.4% so far. If noted, the figure is the largest in at least six weeks. It is because the dollar is set to be in its best week since early April. That is, the Dollar is increasing in price.
A stronger dollar makes some commodities valued in currencies, such as gold, more expensive. Of course, this is quite burdensome for buyers who use other monetary units. Things should be improved quickly to make the market more stable.
The Stimulus for Corona Situation is Still Arranged
A key lawmaker says Democrats in the U.S. House of Representatives are working on a coronavirus stimulus package. Reportedly, the funds to be given this are worth $2.2 trillion to choose from next week. Many hope that this will come true.
The Federal Reserve this week also spoke about the importance of more fiscal stimulus amid investor concerns about another economic blow from the coronavirus pandemic. There is no certainty yet when this pandemic will end. In fact, some vaccines were forced to be discontinued in clinical trials.
As it is known that there are several COVID-19 vaccines that cause strange symptoms in volunteers. The temporary suspension of clinical trials of this vaccine certainly makes many people feel pessimistic about the improvement of the world economy. It is considered quite reasonable.
The Fall in Stocks is Expected to Be the Largest
Based on the market’s data, the stocks are set to fall to their biggest weekly figures since June. This situation was triggered due to concerns about the second wave of virus-related locking. Of course, the situation will weigh on investors' risk appetite in world trade.
The risk of a gold bug is limited to an extension of the global risk-off that triggered the dollar's breakout. A TD Securities analyst said in a note about this possibility. On the other hand, fears of growth have had an impact on platinum conditions.
A lot of speculation arose because of this. The most widely said speculation is a second wave that could further hit diesel sales. This situation is certainly not expected by people. This condition is considered quite dire in Europe. Platinum fell slightly to 0.1% to $847.81.
Meanwhile silver fell as much as 0.8% to $23.02 an ounce. Both metals are heading for their worst week since March 20 this year. However, things can still turn around. It is unlikely that the two commodities will be upgraded again in the future.
