Gold Price inch Lower as Stimulus Hopes Mount

Gold futures contracts inched lower during the Asian trade session on Tuesday after the U.S. President announced possible stimulus measures are being planned to support the economy.

The yellow metal, on Monday hit a seven year high as volatility soared and global equities sold off as oil prices cratered.

As of one am GMT, the spot gold futures contract was down one percent to trade at $1,662.75 per ounce. On Monday, the spot contract hit its highest price point since December 2012 at $1,702.56 per ounce.

U.S. gold futures, for front month delivery, also fell. This contract was down 0.7 percent to fetch $1,664.60 per ounce.

Gold Traders continue to Monitor COVID-19 News and Treasury Yields

The U.S President, Donald Trump announced overnight, possible fiscal measures to support their financial markets and economy.

President Trump said that he will take a “major” step to insulate the economy against the impact of the COVID-19 contagion. He is preparing to discuss as payroll tax cut with Congress today.

However, global traders were flying into the safety of safe haven assets as the coronavirus continues to spread disrupting global supply chains and shuttering industry. There are concerns of a global recession as economies slow and show signs of contraction.

On Monday, the benchmark ten year Treasury yield collapsed. The yield, for the first time ever, fell below 0.5 percent. The ten year yield hit a low below 0.31 percent for a brief period. The thirty year Treasury note went below one percent for a brief time as well overnight.

Crude Oil Prices take a beating thanks to OPEC and Saudi Arabia

Much of the volatility in the global financial markets came from Saudi Arabia. The oil rich kingdom announced that they are cutting prices for their oil exports. They also announced that they would increase production in April.

This comes after OPEC failed to reach a deal with non-member nations led by Russia. This was called the OPEC +, on further production cuts. Traders are now watching to see who blinks first.

Till then oil pressures remain under pressure as global demand softens and the markets are over saturated with oil products.