By Alex Ho
Investing.com - Gold prices were on the rise Wednesday morning in Asia, recovering from a drop below the $1,500 mark Tuesday even after stocks in the U.S. rebounded sharply overnight.
Gold Futures rose 0.55% to $1,534.20 by 10:20 PM ET (2:20 AM GMT).
“It is a great opportunity for people to enter into the gold market.” Michael Matousek, head trader at U.S. Global Investors, told CNBC. “Gold has got a lot of fundamental factors behind it to help drive it higher. Plus, you do have the technical aspect of it given the drawdown we had over the past two days.”
The recent global efforts to stave off a recession have been supportive for gold.
The U.S. Federal Reserve, as well as other central banks, have cut interest rates and announced stimulus packages in the past two weeks. The U.S. is said to be considering a further stimulus package of between $850 billion to more than $1 trillion, according to Treasury Secretary Steven Mnuchin.
“The fact that the Fed is stepping in, they are putting out more liquidity in the market, has helped gold to trade higher. Gold is starting to act like how it should act,” Bob Haberkorn, RJO Futures senior market strategist, told CNBC.
But Goldman Sachs was more reserved about gold’s prospects warning in a note that gold “was also hurt by the fall in oil prices, as it brought Russia’s Central Bank purchases to a halt and could possibly trigger some selling… In the near term, the gold price is likely to remain volatile as it tries to find a new equilibrium.”