Concerns about tense relations between America and China and weak data from America’s economy boosted appetite for investing in the gold market. The price of the yellow metal yesterday settled at its highest level since October 2012.
Gold rose 1.04 percent to $ 1,761.87 an ounce. Gold for delivery in June increased by 0.89 percent to $ 1,772.
The White House economic adviser said, on Friday, that the first phase of a trade agreement between the United States and China, signed in January, would not break down. The two countries are still working together to implement the deal.
China’s Ministry of Commerce announced, on Sunday, that it strongly opposes new US regulations against Huawei. He said he will do everything in his power to protect the rights and interests of Chinese companies.
Meanwhile, retail sales in the United States fell for the second month in April. It has put the economy on the record for the most negative growth in three months since the Great Depression.
Federal Reserve Chairman, Jerome Powell, said that the country’s economy could be postponed to next year and that a full recovery would depend on the production of the Corona vaccine. He also spoke of the need for US government assistance to companies and families to continue for three to six months.
Health officials in Wuhan have tested for coronavirus on more than 3 million citizens in April and May. They plan to check the rest of the city’s population since there is a danger of a second wave of the Coronavirus outbreak in the Chinese city.
Trade tensions between Washington and Beijing push gold higher
Trade tensions between the US and China support an increase in gold prices.
They climbed to new levels after the US President Donald Trump’s announcement on Thursday. He declared that he was not interested in having negotiations with the Chinese president. Trump added that he could cut ties with the country entirely.
Tensions elevated further after the Trump administration’s report on Friday. It said that the US is moving to impede shipments of semiconductors to Huawei Technologies from global chipmakers.
Analysts don’t think that the tensions will improve. The longer the coronavirus problem lasts, the more it accelerates that discourse between the two countries.
Han Tan, a market analyst at FXTM, states that the next level for gold is to touch the $1,800 an ounce. He believes it is just a question of time. China-US tensions are one of the positive catalysts for Bullion.
Phillip Streible, a chief market strategist at Blue Line Futures, thinks that the $1,800 target is possible next week.