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Gold gains its price; Dollar weakens, Coronavirus stimulus package may come

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The market saw a jump in the price of gold on Wednesday, and it goes to the one-week highest value. The reason behind this is the weakling of the US dollar value. This provokes the hope of a stimulus package before the US presidential election.

Spot gold price rises 0.6%, which makes its price $1,917.57/ounce. It is the highest value since October 13. A rise of 0.3% is seen in US gold futures.

The drop in currency value can be the election agenda of the Democrats against President Donald Trump. The election is very close. In this scenario, the announcement of a stimulus package is the only solution. The white house and democrats are not very far from each other regarding the aid bill to boost up the economy. Trump has also commented regarding the reinforcement of equity. It is a ray of hope.

According to economists, gold is the hedge against inflation, currency debasement, and uncertainty. Gold has gained 26% this year. Economists and market analysts have marked the coronavirus slap as the main reason for this downtrend of currency.

According to the OANDA analyst Craig Erlam, the dollar index has slipped to a one-month low against its rivals, which has to make US gold less expensive for holders of the other currencies. This is not a good signal for the USA economy.

According to Edward Meir, an analyst at ED&F Man Capital Markets, the price hike of gold make USA Treasury yields down a bit. He has also pointed towards the weaker dollar for this.

Market participants are now waiting for the US Fed’s two-day policy event. This is going to end on Wednesday. This is the first meeting of Fed since Chairman Jerome Powell unveiled a policy shift towards greater tolerance of inflation. He has also pledged to keep interest rates low for a longer period.

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