Bank analysts argue that after the US presidential elections, election results may be challenged. This will definitely increase market volatility and provide additional capital inflows to safe haven assets.
Experts also believe that safe haven assets will be popular among investors due to the uncertain situation. In the weeks before the presidential elections, the price of gold may skyrocket.
However, the rise in the price of gold is not only caused by the elections. Many countries around the world reintroduce restrictive measures due to the spread of the coronavirus infection. Moreover, relations between the United States and China continue to deteriorate. The global economy is under pressure, investors avoid taking risks. In this regard, according to an analyst from UBS bank, safe haven assets, including gold, are again in great demand.
Moreover, the US Federal Reserve will continue to keep interest rates at zero level until 2023. This, in turn, will provide support for the gold market.
What are the prospects for gold?
Gold lost $100 last week. This should be taken as a temporary correction, as analysts say. This was caused by the strengthening of the US dollar. However, already this week, we can see signs of a recovery in the price of gold, according to analysts from Germany's Commerzbank.
The market is volatile which is good for gold. Besides, some speculators left the precious metals market. Therefore, soon the precious metal will begin to significantly recover in price after the recent fall. The US dollar will be the main growth factor, the rate of which, according to experts, should begin to fall.
Thus, on Tuesday, the price of gold reached its maximum in almost a week amid the depreciation of the US dollar. The dollar has weakened due to the first presidential debate in the US and further developments related to the new bill to help the economy.
The gold price rose by 0.2% to trade at $1,883.7 per troy ounce.
Palladium fell by 0.1% to settle at $2,252.90 per ounce, while silver added 0.1% to $23.74 per ounce. The platinum price dropped to $877.9.
