FXStreet reports that analysts at HSBC think the need for monetary easing and fiscal support should be ultimately positive for the yellow metal.

“The IMF reiterated its forecast of a 2020 global contraction of 4.4%. This is an improvement over a 5.2% contraction predicted in June. Gita Gopinath, the IMF’s chief economist, said some $12 T in fiscal support and unprecedented monetary easing from central banks had helped to limit the damage from the pandemic but support must be maintained.”

“The wholesale drop across the precious metals complex seems a little overdone – although not entirely unwarranted. The problems cited by the IMF’s WEO still require monetary easing and fiscal spending to continue, which is ultimately positive for gold.”