On Monday, the prices of gold remained above the $1,800 an ounce level because of the weaker U.S. dollar and the growing number of new COVID-19 cases around the world.
Spot gold is currently trading at $1,808.05 an ounce as of 1026 GMT.
The valuation of the greenback dropped by 0.2% against a basket of rival currencies which made the yellow metal cheaper for investors using other currencies.
The total number of coronavirus infections around the world, according to a Reuters’ tally, has already reached more than 12.38 million while total deaths are fast approaching 600,000. In the U.S., the number of new infections continued to grow, with Florida reporting a record one-day increase of more than 15,000 yesterday.
According to AxiCorp’s chief market strategist Stephen Innes, the COVID-19 issue is not likely to go away anytime soon. He also does not expect the Federal Reserve to change the source of the interest rates. These two factors support the strong pricing of the precious metal. In addition, the uncertainty in the medium-term outlook of global economic recovery provides the bullion more room to go even higher.
Compounding worries about economic recovery, U.S. President Donald Trump said on Friday that he is even not thinking about Phase 2 trade negotiations with China. He said U.S. relations with Beijing has severely damaged because of the pandemic and other issues. Trump believes that China could have stopped the plague but did not stop it.
Meanwhile, physical gold was sold at premium prices in India last week for the first time in 2020. The price growth is attributed to the huge drop in imports and the near stoppage of smuggling. These offset the impact of higher domestic prices and high unemployment rates which could have deterred gold buyers.
In a related development, the U.S. Commodity Futures Trading reported that market speculators have raised their bullish stance in COMEX gold in the week that ended on July 7. This development reflects market sentiments.