Gold Holds Steady as Markets Focus on US-China Relations Even as Economies Reopen
On Wednesday, gold prices are trading somewhat flat over the mixed market sentiment, as traders focused on the reopening of economies as well as rising US-China tensions. At the time of writing, GOLD is trading at a little above $1,708.
The slight improvement in the risk appetite in global financial markets was offset by escalating concerns about US and China relations coming under strain over China’s decision to impose a national security legislation on Hong Kong. The US on Tuesday stated that it would announce retaliatory measures by the end of this week if China went ahead with the proposed bill.
While these developments supported the safe haven appeal of gold, prices came under pressure after consumer confidence in the US marked an improvement during the month of May. Stock markets in the US also rallied on Tuesday, with S&P 500 soaring above the 3,000 level even as NYSE reopened after being shut for two months as a result of the coronavirus crisis.
Gold also remains supported over worries of economic recovery after the pandemic. According to a recent Reuters poll, recovery could take much longer than previously anticipated even though economies have started reopening.
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