Gold Strengthens as US-China Tensions Escalate
Gold prices are back to trading bullish after losing more than 1% during the previous session as markets focus on worsening US-China
On Friday, gold prices are back to trading bullish after losing more than 1% during the previous session as markets focus on worsening US-China relations again. At the time of writing, GOLD is trading at a little above $1,726.
Despite these gains, gold is set to post a weekly loss, down by 0.8% for the week so far after the risk appetite returned to markets over rising hopes about economic recovery as countries begin easing lockdown measures. However, the focus shifted from the reopening of economies and back to US-China relations after China announced its intention to impose a new national security legislation on Hong Kong, and was cautioned against such a move by US President Donald Trump.
Gold prices also remain supported by recent weak economic data releases and the prospect of a severe recession in the global economy in the wake of the coronavirus pandemic. According to NY Fed President John Williams, economic recovery in the US seems to be getting more distant as more data releases reveal the extent of damage the pandemic has driven across the economy.
Gold’s safe haven appeal remains strong even as markets anticipate leading governments and central banks to pour in more stimulus measures to support their economies through the ongoing crisis.
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