Gold Prices Up In The Midst of Increasing Unpredictability

London (Mar 20)  Gold prices were on the rise Friday morning even as investors reduce their risk in an increasingly unpredictable market.

Gold Futures inched back towards the $1,500 mark after taking huge swings between $1,457.9 and $1,486 in the last session. Prices for the yellow metal rose 0.55% to $1,489 by 11 PM ET (3 AM GMT). 

As the COVID-19 pandemic continues to threaten recession, global efforts to sooth equity investors in the past week cut into gold’s reputation as a safe-haven. Investors flocked to the strengthening U.S. dollar in a scramble for cash to cover losses in other markets.

Vivek Dhar, an analyst at Commonwealth Bank of Australia, explained to Bloomberg, “While stimulus measures/rate cuts - including the ECB emergency bond-buying program - are usually positive for gold, we think any support will be short-lived,” He added, “There is a clear preference for the U.S. dollar over gold as global market risks intensify, and that should pressure gold prices lower in the near term.”

Gold prices “can’t catch a break” said Ed Moya, Oanda market analyst, in a Thursday note. But he sounded a more positive note as he added, “The last 24-hours yielded additional stimulus measures from the Fed, ECB and BOE, which should clearly provide gold a springboard that will shoot prices higher once the scramble for cash eases and dollar loses its crown.  If the $1,450 an ounce level breaks for gold, we could see one last extreme selloff before long-term bulls jump back in.”

Investing.com