Gold prices continue its gains on investors buying safe haven

Mohammed Abdelkhalik
December 3, 2020

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Gold Prices Outlook – 3rd December 2020

Gold prices increased on Thursday, extending its gains for the third consecutive day, registering higher in about two weeks, supported by the sharp decline in the levels of the USD. In addition to the continued buying of the metal as a safe haven for concerns about global inflation.

Gold prices increased by 0.7% to $ 1,843.42, the highest since November 23 last, from today’s opening level of $ 1,830.10, and reached the lowest level at $ 1,826.11.

Chart of XAUUSD - Gold Prices - 3rd December 2020

Yesterday, the precious metal “gold” ended up 0.9%, in the second consecutive daily gain, thanks to the strong activity of buying the safe-haven metal, due to the possibility of further stimulus measures in Europe and the United States.

Gold prices increase after the USD decline

The dollar index decreased on Thursday by more than 0.3%, to continue its losses for the third day in a row, recording the lowest level in two and a half years, at 90.83, reflecting the continued sharp decline in the levels of the US currency against a basket of major and minor currencies.

As we know, the drop in the US currency supports the rise in gold prices, as it is denominated in the US dollar, and its cost is lower for holders of other currencies.

The sharp drop in dollar levels comes in light of the strong sentiment that controls investors, regarding Coronavirus vaccines, in addition to the imminent approval of a new fiscal stimulus in the United States.

Gold prices are also supported by the safe-haven buying of the metal, as the metal is considered one of the best financial assets as a hedge against inflation, and it is expected that the large stimulus measures will lead to more stagflation.

Author Mohammed Abdelkhalik

Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.