Gold prices stabilized on Wednesday near its lowest level in four and a half months, which it recorded yesterday after two sessions of a sharp decline, where this comes in light of investors abandoning safe haven investments and shift towards risky assets.
Gold prices are currently trading at the level of $1809.56 an ounce after opening today's session at $ 1807.64 an ounce, recording the highest at $1815.03 per ounce and the lowest level at $1801.53 per ounce.
The yellow metal dropped significantly this week after it opened the week’s trading at the level of $1871.08 an ounce, as it recorded yesterday its lowest level since last July at $1800 an ounce.
Gold continued its decline as stock markets reached a record high, and the Dow Jones Industrial Average in the United States breached the 30,000-point barrier for the first time.
Investors are turning away from risk-averse assets as vaccine development lends confidence to economic prospects around the world. Consequently, safe-haven assets such as gold are being abandoned, pushing them down.
The current wave of optimism was aided by the official approval granted for the US presidential transition by Emily Murphy, Director of the Public Services Administration. There have been persistent concerns that President Trump may stop allowing the incoming administration of President-elect Joe Biden access to both critical state information and funding until the last minute.
As for the levels of the dollar, it fell to its lowest levels in three months against a basket of major currencies, which was supposed to support the rise in gold due to the inverse relationship between them, but the weak demand for safe havens outweighed the positive impact of the dollar's decline on gold prices.
The dollar index, which measures the currency’s performance against a basket of six currencies, hit its lowest level in three months at 91.93, after opening the day’s trading at 92.11.