Gold Gains Over Rising US-China Tensions, Weakness in US Dollar
Arslan Butt • 1 min read
On Thursday, gold prices have risen higher after weakening over the previous session amid worries about escalating geopolitical tensions even as the US dollar trades weak. At the time of writing, GOLD is trading at a little above $1,703.
Gold is trading bullish over worries that US-China tensions could flare up after latest news reports hint at US considering imposing restrictions on passenger flights from China and on state-run Chinese media outlets. Tensions have been simmering between the two countries this week after China halted imports of some US agricultural goods, threatening the phase one trade deal.
Gold prices have been boosted over rising hopes of the ECB rolling out more stimulus measures to prop up Eurozone economies. When central banks and governments turn more dovish and announce more stimulus, it lends support to the safe haven appeal of the precious metal.
A continued weakness in the US dollar on the back of improving risk appetite in global markets has also helped raise gold prices higher. Gold shares a negative correlation with the US dollar, and whenever the dollar weakens, the yellow metal becomes more attractive to purchase for holders of non-dollar currencies.