Gold price climbed to more than a one-week high on Monday as protests continued across major US cities over the weekend, adding another layer of economic uncertainty to the potential impact of the strained US-China relations and further boosting demand for save-haven assets.
Spot gold was up 0.4% to $1,736.45 per ounce by 11:35 a.m. EST. Gold futures for July delivery also saw a slight increase of 0.2% to $1,742.90.
Bullion has gradually creeped back towards its previous seven-year high as rising economic and political uncertainties continue to overshadow optimism of a quick recovery from the covid-19 crisis.
“Concerns about the unrest in the US at the moment appear to be weighing on market sentiment,” Michael McCarthy, chief strategist at CMC Markets, told Reuters, adding that rising tensions between the world’s top two economies further supported gold.
Animosity continued between the two nations on Sunday when Chinese state media blasted the US for interfering with Hong Kong’s affairs and attacking China’s domestic politics.
Beijing also criticized President Donald Trump for his response to the ongoing civil unrest across the US, as well as the decision to sever ties with the World Health Organization.
“Higher tensions between China and the US are bringing safe-haven buying. Tensions within the US are not helping the cause, while the dollar is pretty much on its lows,” Afshin Nabavi, senior vice president at precious metals trader MKS SA, told CNBC.
On Friday, holdings of SPDR Gold Trust — the world’s largest gold-backed exchange-traded fund — rose 0.3% to 1,123.14 tonnes, a new seven-year high.
Elsewhere, silver rose 2.4% to $18.30 per ounce, its highest since February. Palladium and platinum also gained 1.0% and 1.8% respectively.
(With files from Reuters)