Gold prices rose despite the US dollar strengthened in the trading session Monday (20 / April) tonight. Spot gold prices rose 0.5 percent to 1,691.88 at 15:25 GMT, after touching the lowest level at 1,670.55 on April 9. Meanwhile, the price of gold futures rose 0.7 percent to 1,709.90, and the XAU / USD chart below shows an increase of 0.73 percent to 1693.88.
"Gold is still very much subject to what is happening in the market at large ... There will be a positive outlook from the economy going forward because everything starts to open up, and given the potential for massive monetary and fiscal stimulus, the market will return to gold as a protector against inflation... " said Bart Melek, commodity analyst at TD Securities.
The price of gold rose in response to Wall Street, which fell in the opening session, affected by energy sector stocks which collapsed because of falling oil prices. Investors will look forward to the release of economic data this week, to get further confirmation of the scale of economic damage caused by the Coronavirus.
The current market focus is also on plans to reopen US economic activity that sparked debate. The governors of the US states that were most severely affected by the pandemic, opposed President Donald Trump's statement that said testing of Corona patients was sufficient so that the region should reopen its economic activities.
Moderate Corrected Gold After a Month of Rally
Trump argued that it needed to be done, given the extension of the Stay-At-Home program to stop the spread of Corona, have received a lot of protests from some parties.
Analysts consider that the two things become a positive catalyst for the price of gold in the medium term. According to BMO analyst Tai Wong, the price of gold was moderately corrected after a month-long rally of low levels caused by panic. The bond market is calm because the US is estimated to have passed the critical period of the pandemic, and the focus has been on opening up economic activity.
Earlier on the weekend (18 / April), spot gold prices sank 1.7 percent to $ 1,689.22 an ounce at 15:33 GMT. This decline is $ 60 lower than the peak price reached earlier this week when responding to the issue of the possibility of the worst recession in a decade. Meanwhile, the price of gold futures for June delivery on the Comex in New York fell 2 percent to $ 1,698.80 an ounce.
World stock markets have skyrocketed for almost two consecutive weeks after last Thursday night (16 / April) Trump announced a scheme to implement a plan to gradually open the US economy. This scheme was originally needed after the shutdown was previously carried out to prevent the spread of Coronavirus outbreaks.
Risk Interest Growth Factors
In the scheme, Trump wrote down three opening processes to ease economic conditions that were still reeling. However, the nature of the scheme is more of a recommendation than an order. Trump left the decision fully to the governors of each state.
"Gold and stocks are negatively correlated today, with the equity rally depressing the price of gold. Instructions on the reopening of the economy presented by Trump have an impact on the rise of the equity market," said Tai Wong, an analyst at BMO.
Wong added that if stocks continued to increase until the market closed, profit-taking in gold would be increasingly triggered.
Also, another factor that adds to the risk interest in higher-risk profile assets is the detailed data on Coronavirus drug experiments conducted by the US pharmaceutical manufacturer, Gilead Sciences Inc, on Corona patients who are quite severe.
However, the positive news is still overshadowed by permanent economic damage that affects consumer interest and purchasing power. Therefore, the price of gold can still strengthen again.
