The value of gold has embarked on a steady rise as of late as investors focus their sights on the timeline for a U.S. stimulus package and its impending effect on the value of the dollar. This cautious outlook on markets has aided gold in its recovery from a seven-week slump.
While global shares slipped last week amid increased optimism surrounding a potential $1.9 trillion U.S. aid package, markets steadied once again when the U.S. markets closed temporarily on Monday for a holiday.
According to Margaret Yang, a strategist at DailyFX, bullion gold had recovered from earlier losses thanks to increased caution in today’s markets. Yang went on to explain that this caution has been exercised as a result of U.S. equities pulling back from their recent highs.
Bullion has declined by more than 3% this year while the dollar strengthened amid hopes that COVID-19 vaccines and a U.S. stimulus package would aid in economic recovery.
With inflation expected to rise in March—a month in which gold typically performs well—the demand for gold has already begun to waver. Spot gold gained 0.3% in London on Monday, a slight recovery following the 1.3% that it lost since the start of the year.
