Gold prices firm on economic woes, strained US-China ties

Marco Green
June 3, 2020

Globally, gold prices climbed as reports of riots in the United States rattled investors already reeling from the deepening Sino-US rift, fanning concerns of a fresh economic setback and drove traders towards the safe-haven metal, according to Reuters.

Reflecting investor sentiment, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.5% to 1,128.40 tonnes on Monday, the highest in seven years.

"Higher tensions between China and the USA are bringing safe-haven buying".

The dollar fell to its lowest since mid-March, making gold less expensive for holders of other currencies. "Tensions within the USA is not helping the cause, while the dollar is pretty much on its lows", said Afshin Nabavi, senior vice president at precious metals trader MKS SA.

"If you see emotions heating up between US and China over Hong Kong - that's going to change the trade dynamic with Hong Kong".

Gold continued to attract strong investment demand amid global uncertainties with holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund or ETF, rising 0.3% to 1,123.14 tonnes on Friday.

Bullion, considered a safe store of value during political and financial uncertainty, got further support after U.S. President Donald Trump vowed to use the military to halt widespread protests in U.S. cities over the death of a black man in police custody. The closely packed crowds and demonstrators not wearing masks sparked fears of a resurgence of Covid-19, which has killed more than 101,000 Americans.

Gains in stock markets have triggered some profit-taking in the gold price, said Ajay Kedia, director at Kedia Commodities in Mumbai. "That clearly shows that people are moving out of gold and targeting silver", Kedia added. Palladium inched up 0.1% to US$1,947.01 per ounce, and silver rose 1.1% to US$18.04, while platinum declined 0.7% to US$830.81.

Silver rose 2% to $18.20 per ounce, having earlier touched its highest since February 25.

Other reports by Click Lancashire

Discuss This Article

FOLLOW OUR NEWSPAPER