• 08/08/2022 10:17 pm

#Gold prices to take cues from US-China news, steps taken to combat COVID-19

Navneet Damani

Gold and silver just experienced a stunning week in which they surged on real, solid fundamentals, with still more steam left in them.

There were certain developments in the fundamentals and few additions that lent support to both the metals. Every day was a new high for the bullion. Gold marked a high of $2,078 per troy ounce and a low of $1,963. Similarly, the white metal saw increased volatility with a high of $29.90 and low of $24.18 per troy ounce.

Major countries are fully or partially functioning even though the threat of virus hitting the economy and affecting people at a significant pace is increasing rapidly.

After the lifting of lockdowns, economies are struggling to get back on their feet. Many countries, including the UK, have said a second wave is very much possible and could hit the economy. These countries are not in favour of ending restrictions.

The virus has affected more than 20 million people and claimed more than 7.5 lakh lives. On the other hand, the vaccine news is filling the market with optimism, as many companies have completed or are in the final stages of trials and are announcing positive news.

Russia has shared positive news on the vaccine. US President Donald Trump has said that by November a vaccine could hit the market. These are some positive developments though talks about any economic recovery or progress will not give the market confidence till an official announcement of a vaccine.

The US and China are bringing all the twists and turns in the markets that are capable enough to bring volatility. The focus has now shifted from sanctions on goods and services to the concern of how to deal with the TikTok issue.

Last week, we also saw tiff reigniting between the US and Canada, as Trump has signed as a proclamation re-imposing aluminium tariffs on Canada.

The RBI and Bank of England decided to hold rates and expressed concerns over the pace of recovery. Both the central banks showed concerns regarding the impact of COVID on their economies and downgraded their inflation and growth numbers for this year.

Till now, major central banks have announced huge relief packages to provide liquidity and are ready to provide more. The US is also considering a new relief bill though negotiations have not gone as planned.

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