Gold Gains as US-China Tensions Flare Up

Gold is starting Wednesday on a bullish note, climbing higher as US-China tensions return to the spotlight even as markets continue to worry about economic recovery in the aftermath of the coronavirus pandemic. At the time of writing, GOLD is trading at a little above $1,887.

During the previous session, US President Donald Trump once again pointed the finger on China at the UN General Assembly for the spread of the coronavirus pandemic globally. In response, China accused Trump of lying, raising tensions between the two world leaders.

While the safe haven appeal strengthens, gains in gold remain limited due to the US dollar making gains against other leading currencies. The US dollar index soared to an eight week high over fears of Europe and Britain reimposing lockdowns due to a second wave of coronavirus.

Gold, meanwhile, made gains after leading policymakers in the US broached the idea of more stimulus aimed at supporting small businesses impacted by the pandemic. In addition, Chicago Fed President Charles Evans warned that the US economy could experience a deeper recession if it did not unleash more stimulus initiatives.