Gold May Retreat amid Growing COVID-19

WikiFX News (26 Sept) -Recently, the US dollar surged at the expense of gold prices. European countries have imposed new restrictions as coronavirus cases come roaring back, which fuels negative sentiment in markets.

There are over 31 million confirmed COVID-19 cases globally, according to the latest tally from Johns Hopkins University. Besides the US, Europe has seen its weekly new infections exceeding those reported during the peak in March. European countries such as Germany, Italy, and the Netherlands have seen the pandemic significantly re-emerging with Spain facing the worst coronavirus infection rate.

Investors had their negative sentiment increased amid worries about growing infections, lockdown extension, and the uncertainty over governments' new bail-outs, which caused broad risk-off tones displayed, sending the greenback higher while punishing gold.

Gold prices have breached below the $1,900 handle, and if rallies are well capped below $1,800, from current trends, a period of consolidation and even lower prices within an upper trading range are on the way.

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Chart: Historical Gold Prices