Gold’s safe haven status has been challenged further this week as gold prices continue to decline. The commodity was down to $1,498 on Thursday as world stock markets continued to slump due to the coronavirus pandemic.
More risk-averse investors have been displaying a marked preference for the dollar at the expense of bullion, according to FXTM analysts.
“Gold has been left in the dollar’s wake, as investors rush to lap up the greenback amid a liquidity crunch and fears that the global economy is hurtling towards a recession," said Han Tan, market analyst at FXTM.
"With volatility in gold prices at its highest since 2008, bullion has not been spared by the market panic."
Benzinga is covering every angle of how the coronavirus affects the financial world. For daily updates, sign up for our coronavirus newsletter.
Once the liquidity squeeze eases and gold prices find more stable footing, investors concerned about the global economic outlook should eventually come back to the precious metal and send prices towards $1,600, according to FXTM.
For the immediate term, should bullion prices weaken further, stronger support is set to arrive at the $1,400 psychological level, Tan said.
Once gold is allowed to rediscover its equilibrium, that should serve as a platform for bullion to make its way toward $1,600, the analyst said.
Price Action
The SPDR Gold Trust GLD was trading down 0.53% at $139.95 at the time of publication Thursday and the VanEck Vectors Gold Miners ETF GDX was trading up 7.27% at $21.11.
Related Links:
Oil Prices Fall To 17-Year Low, OPEC And IEA Warn Of 'Major Consequences' For Developing Countries
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
