Gold was up again on Wednesday in Asia, leveraging on its gains from the previous session. The safe-haven asset had jumped by 1.2% during the previous session, after which Gold futures moved up to the price of $1722.75 as at 4pm local time.
Also worthy of note is that a number of stocks, which typically move inversely to gold, were predominantly up.
The price increase was as a result of the optimism of investors, albeit cautiously, ahead of the U.S. Federal Reserve unveiling key details from its policy meeting, which is scheduled to be concluded later in the day. This optimism rests on expectations that the details of the policy meeting will include even more stimulus measures for the U.S economy towards revamping it against the backdrop of disruptions caused by the Covid-19 pandemic.
David Meger, director of metals trading at High Ridge Futures, in a conversation with CNBC explained that “The expectations of further Fed stimulus are in the forefront of what’s been supporting gold over the last couple of days. In addition, we’re also seeing global equities tick lower slightly across the board.”
“We’re seeing unprecedented amount of global liquidity and that underlying fundamental environment is extremely supportive for gold,” he added.