Gold Gains as Safe Haven Appeal Strengthens Over Hong Kong Issue
Arslan Butt • 1 min read
The safe haven gold continues to make gains as a result of escalating tensions between the US and China over the issue of the national security bill on Hong Kong which China is expected to pass soon and could cause the US to retaliate with sanctions. At the time of writing, GOLD is trading at a little above $1,714.
Gold remains supported over expectations that the US could announce visa and economic sanctions against China if China passes the bill on Hong Kong. The US government maintains that such a move by China would threaten Hong Kong’s autonomy and freedom.
On Wednesday, matters worsened after the US Secretary of State Mike Pompeo declared that Hong Kong was no longer eligible for a special status that the US had previously accorded to it. This is likely to have a severe impact on Hong Kong’s standing as an important financial hub in the world.
Gold is also trading bullish over expectations for countries around the world to announce more stimulus measures to protect their economies from the fallout of the coronavirus pandemic. During the previous session, the EU rolled out a 750 billion euro recovery fund while Japan confirmed its second round of stimulus measures worth $1.1 trillion to support its economy.