scorecardresearch
Follow Us:
Friday, July 10, 2020

Gold prices rise as Hong Kong dispute riles China-US ties

Spot gold was up 0.6% at $1,718.77 per ounce, as of 0544 GMT, after dropping to $1,693.22 on Wednesday. US gold futures rose 0.5% to $1,717.80.

By: Reuters | Published: May 28, 2020 1:33:32 pm
An employee holds a one kilogram fine gold bar in the precious metals vault at Pro Aurum KG in Munich, Germany, on Wednesday, July 10, 2019. Photographer: Michaela Handrek-Rehle/Bloomberg

Gold rose on Thursday after hitting a two-week low in the previous session as the rift between Washington and Beijing over Hong Kong escalated, with prices also supported by central bank and government largesse to cushion the blow from the pandemic.

Spot gold was up 0.6% at $1,718.77 per ounce, as of 0544 GMT, after dropping to $1,693.22 on Wednesday. US gold futures rose 0.5% to $1,717.80.

Worsening relations between the world’s two biggest economies could further hobble global business activity, which is already under intense pressure due to the coronavirus crisis.

“The US and China have disagreements on many fronts. There is trade, and there is inquiry into the coronavirus, and now this dispute over Hong Kong,” said Michael McCarthy, chief strategist at CMC Markets.

“That’s bad news for the globe as it spills over into trade- the impact on global growth, while the global economies are fragile, could be severe.”

US Secretary of State Mike Pompeo said on Wednesday that Hong Kong no longer qualifies for its special status under US law, while President Donald Trump said he’d announce a response this week.

“The US is likely to respond to China’s new security laws on Hong Kong … Weak economies and continued low interest rates are also supporting gold,” said National Australia Bank economist John Sharma.

Japan approved a fresh $1.1 trillion stimulus package, while the European Union unveiled one of 750 billion euros.

Large stimulus measures tend to support gold, which is often considered a hedge against inflation and currency debasement.

Reflecting investor sentiment, SPDR Gold Trust holdings, the world’s largest gold-backed exchange-traded fund, rose 0.2% to 1,119.05 tonnes on Wednesday, a seven year high.

Palladium rose 1.6% to $1,966.30 per ounce and platinum gained 2.3% to $837.72, while silver was flat at $17.30.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.

Advertisement
Advertisement
Advertisement
Advertisement