Gold gains as uncertainty over Trump's response to China spurs demand
· Gold rose 1% on Friday as caution set in with investors awaiting U.S. President Donald Trump’s response to a Chinese national security law for Hong Kong and its potential impact on an already fragile global economy.
· Spot gold climbed 0.9% to $1,734.70 per ounce by 1:44 p.m. EDT (1744 GMT).
· U.S. gold futures settled up 1.4% at $1,751.70.
· “Markets are now strictly focused on the two largest economies and what is likely going to be a long, drawn-out battle,” said Edward Moya, a senior market analyst at broker OANDA.
· “You’re going to continue to see safe-haven demand (for gold) because the uncertainty over how the U.S.-China tensions are going to play out is extremely high.”
· Trump is expected to hold a news conference on China later on Friday as his administration moves to pressure Beijing over its treatment of Hong Kong.
· Mounting fears over the economic toll from the coronavirus, exacerbated by the widening U.S.-China rift, and a resultant environment of low interest rates globally have put safe-haven bullion on track for an over 3% monthly gain.
· “Stock market gains are likely to cap gold’s upward momentum, however, gold prices have risen amid a risk-on environment and a risk-off environment,” said Standard Chartered Bank analyst Suki Cooper. “There is good downside support around $1,700 and resistance around $1,765.”
· Wall Street’s main indexes fell on Friday, bolstering gold’s appeal.
· Elsewhere, silver gained 2.5% to $17.86 an ounce. Prices were up 18.8% for the month, the biggest gain since January 2012.
· Global efforts to restart economies could boost silver demand, making prices of the metal, which slipped to an all-time low relative to gold during the crisis, likely to rebound strongly.
· Palladium fell 1% to $1,911.54 an ounce. Platinum slipped 0.8% to $831.90 but was on track for its best month since August 2019.
Reference: Reuters
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