Gold price rallied on Friday to its highest in a week as investors await US President Donald Trump’s official response to China’s national security law imposed on Hong Kong and the potential impact this could have on the global economy.
Spot gold climbed 0.9% to $1,734.95 per ounce by noon ET, on pace for a montly gain of 3%. Gold futures for June delivery also rose 1.3% to $1,742.90 per ounce on the Comex in New York.
Meanwhile, Wall Street indices fell lower, while the dollar touched its lowest in over two months
Meanwhile, Wall Street indices fell lower, while the dollar touched its lowest in over two months, as uncertainties begin to kick in surrounding the latest political rift between the world’s top 2 economies.
“Markets are now strictly focused on the two largest economies and what is likely going to be a long drawn out battle,” Edward Moya, a senior market analyst at broker OANDA, told CNBC.
“You’re going to continue to see safe-haven demand (for gold) because the uncertainty over how the US-China tensions are going to play out is extremely high,” he added.
The US President is expected to hold a news conference on China later in the day as his administration ramps up pressure on Beijing over its treatment of Hong Kong.
“Even with many economies reopening, the economic status is still quite weak. So with this new geopolitical tension it means the recovery in many parts of the world can take longer, which could lift gold prices,” Bank of China International analyst Xiao Fu said.
In other precious metals, silver climbed 2.5% to $17.81 an ounce, en route to its best month since August 2013.
Both palladium and platinum also saw gains of 0.8% and 1.4% respectively.