By Gina Lee
Investing.com - Gold prices in Asia traded slightly lower on Wednesday morning despite continuing economic uncertainty.
The yellow metal continued its losses from the previous session as gold futures were down 0.22% at $1,680 by 9:33 PM ET (2:33 AM GMT).
Although gold prices tend to move in the opposite direction from stocks, the two moved in the same direction for the second day in a row. Asian stock markets opened on Wednesday with losses.
“You have a bunch of shell-shocked market makers who are literally hiding under their desks and do not and possibly cannot make markets in any size, shape or form,” David Govett, head of precious metals trading at Marex Spectron, told Bloomberg.
“Hence we have the lack of liquidity, the small volumes and the wide spreads.”
Improving investor sentiment as the data seems to indicate declining numbers of new COVID-19 cases is also impacting gold prices.
“Risk appetite is back in the markets as new infections are declining, that’s weighing on gold prices. Also, higher yields are negative for gold,” Quantitative Commodity Research Analyst Peter Fertig told CNBC.
"However, some investors fear that monetary policy would lead to inflation. For them, buying gold at these levels remains attractive,” he added.
But some analysts were positive about the impact of various government economic packages for gold.
“Gold investors are reveling in the level of central bank stimulus and fiscal spending, especially when it raises government debt levels,” Stephen Innes, chief market strategist at AxiCorp, said in a note.