The gold price is holding on to $1,640. After a quick jump yesterday above $1,650, the price declined to $1,630 due to the recovery of S&P 500 and other US major indices. This morning, with European indices in red, bullion was able to recover to $1,640. After a few days of direct correlation with stock markets – due to the Fed’s decision to cut interest rates from 1.75% to 1.25% – we are back to the usual inverse correlation. In other words, gold traditionally performs best when stocks are falling.
A fresh climb above $1,645 would offer a strength signal for bullion, even if this scenario remains strongly linked to the latest updates on coronavirus and its impact on stock markets.
