Gold prices surge as IMF cut growth forecasts
Gold prices were higher on Tuesday, as the International Monetary Fund adjusted its 2021 growth forecast.
In a report published via the World Economic Forum, the IMF announced that it revised its expectation for growth from 5.9% in July, to 5.8% today.
Following the revision, Gita Gopinath, who is the chief economist at the IMF stated that, “This modest headline revision masks large downgrades for some countries”.
|💡 How do these forecasts affect gold prices?|
During times of economic uncertainty, as seen during times of economic recession, more people turn to investing in gold because of its enduring value. Gold is often considered a “safe haven” for investors during turbulent times.
When the expected or actual returns on bonds, equities, and real estate fall, the interest in gold investing can increase, driving up its price. Gold can be used as a hedge to protect against economic events like currency devaluation or inflation. In addition, gold is viewed as providing protection during periods of political instability as well.
She went on to add that, “The outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics. The downgrade also reflects more difficult near-term prospects for the advanced economy group, in part due to supply disruptions”.
Gold fell to an intraday low of $1,750, before hitting a high of $1,769 on the news.
Sterling strengthens as UK payrolls hit record
In the United Kingdom, data today showed that payrolls climbed by their most on record, as employers continued to hire post-pandemic.
Figures from the Office for National Statistics showed that employment levels grew by 235,000 versus expectations of 243,000.
This follows a rise of 207,000 in August and comes as the government-led furlough scheme expired last month.
After trading at a high of 0.8518 prior to the announcement, EURGBP fell to an intraday low of 0.8473, as the pound continues to test multi-year lows against the Euro.
With gains in Sterling, the London based FTSE 100 closed 0.23% lower.
Bitcoin climbs to 5-month high
Today’s Bullish sentiment was also present within cryptocurrency markets, with Bitcoin climbing to its highest level in 5-months.
BTCUSD rallied to an intraday high of $57,631, which was its highest point since May 12th.
The gains in Bitcoin come as many expect the Securities and Exchange Committee to approve an ETF for the cryptocurrency in upcoming weeks.
Although BTC was higher on the news, the likes of Ethereum and Cardano traded lower, with Shiba Inu gaining, climbing to become the 15th largest coin by market cap.
As of writing, BTCUSD had given up the earlier gains, trading at $55,740.
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