Gold Rises to Highest Level Since Mid-May – Second Wave Fears, Geopolitical Tensions Support
Arslan Butt • 1 min read
At the beginning of a brand new trading week, gold prices have surged to the highest level on over a month as markets focus on the rising likelihood of a second wave of coronavirus as more countries report a spike in cases after reopening their economies. At the time of writing, GOLD is trading at a little above $1,752.
Markets are trading with a risk-off sentiment as China and Australia reimpose lockdown restrictions in regions that have reported a surge in the number of cases over the past few days. Renewed fears of more lockdowns are supporting the safe haven appeal of gold in global financial markets and sending prices higher for now.
The WHO also reported a record surge in the number of cases globally on Sunday, with more than 183k cases being reported within a day. In the US as well, Apple has announced store closures in 11 locations amid rising number of cases in some states.
Gold prices are also enjoying support from recent cautious comments from Fed officials about economic recovery in the US and how it can be delayed in the event of a second wave of the pandemic. They have also warned that unemployment levels could rise once again unless the pandemic is brought under control.
Gold is also in favor among investors over renewed geopolitical tensions around the world, especially in Asia. China’s new national security law for Hong Kong can override any existing domestic laws, giving China more power over the island, heightening worries about more unrest in the region.