“Stronger” US Dollar Pushes Gold Price Below $1,870

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There are many people who remain bullish on gold and silver despite the current price momentum. For reasons unknown, the entire world sees the US Dollar as a “strengthening asset”, even though it is anything but. COVID-19 will not allow for any major economic recovery in the foreseeable future. 

Is the US Dollar Weak or Strong?

That will always be the tough question to ask. Simply because some analysts and bank officials claim the US Dollar is recovering, doesn’t mean things will improve. There is no global economic recovery to speak of, thanks to COVID-19. Claims by President Trump should never be taken at face value, especially where finances are concerned. 

Despite all of this, it seems the entire world agrees on how the US Dollar is gaining momentum. It is true the Dollar Index has held its own quite well compared to rival currencies. That being said, all of these markets can be manipulated with relative ease. On their own, they can never be interpreted as a market indicator. 

Europe and Asia are still dealing with the COVID-19 fallout. Slowing economic growth is the only outcome for these regions. The same will happen to the United States, as this region will see COVID-19 wave 1 and 2 collide in quick succession. What impact that will have on the US economy, is impossible to predict.

Furthermore, there are Presidential elections come November. For weeks, Trump and Biden have been at each other’s throats, instead of helping the economy. The initially promised second stimulus check has yet to be issued. Households across the nation are struggling, yet somehow, the US Dollar is recovering miraculously? 

More Bearish Gold Momentum

Regardless of how one wants to look at the trends, gold is going down further. Its price has now slipped below the $1,900 threshold. In fact, it may very well hit $1,850 in the coming days. It is not necessarily a worrisome trend as of yet. However, the gold futures are not looking all that healthy either. 

Making bullion more attractive as an investment vehicle will require some major macroeconomic changes. For now, no help should be expected in this regard. 

The upcoming US jobless claims report may provide some more insights as to what is going on in America exactly. For now, it remains anyone’s guessing game, with the Federal Reserve happily pulling on everyone’s strings with bold claims. 

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