Gold: Fundamental backdrop

The issue for gold is the dollar strength, which is pushing demand for the precious metal lower. Interestingly the fall in gold is much less than that of the indices, as FXStreet’s analyst Rajan Dhall notes.

Key quotes

“Normally it is gold that benefits from the risk-off theme but it seems that the greenback is the asset of choice during the COVID-19 pandemic.”

“The general risk theme has been dominated by the drop in the price of oil. Gold could then rise as the market paradigm shifts in the future and the dollar strength eases but this could take some time.”

“The bias is still negative for now (short-term) and will only change if $1703.58 is taken out to the upside once again.”