Gold Prices Edging Up: Disputes Rile China/US Relations
EDITOR NOTE: Economic disruptions, political turmoil, stimulus measures and uncertainty over the future of global commerce all combine to push gold higher and will continue to do so. Now is the time to buy.
Gold edged up on Thursday after hitting a two-week low in the previous session as the rift between Washington and Beijing over Hong Kong escalated, with prices also supported by central bank and government largesse to cushion the blow from the pandemic.
Spot gold was up 0.2% at $1,712.39 per ounce, as of 0315 GMT, after dropping to $1,693.22 on Wednesday. U.S. gold futures were flat at $1,711.40. Worsening relations between the world's two biggest economies could further hobble global business activity, which is already under intense pressure due to the coronavirus crisis.
"The U.S. and China have disagreements on many fronts. There is trade, and there is inquiry into the coronavirus, and now this dispute over Hong Kong," said Michael McCarthy, chief strategist at CMC Markets.
"That's bad news for the globe as it spills over into trade - the impact on global growth, while the global economies are fragile, could be severe.
U.S. Secretary of State Mike Pompeo said on Wednesday that Hong Kong no longer qualifies for its special status under U.S. law, while President Donald Trump said he'd announce a response this week.
"The U.S. is likely to respond to China's new security laws on Hong Kong ... Weak economies and continued low interest rates are also supporting gold," said National Australia Bank economist John Sharma. Japan approved a fresh $1.1 trillion stimulus package, while the European Union unveiled one of 750 billion euros.
Large stimulus measures tend to support gold, which is often considered a hedge against inflation and currency debasement. Reflecting investor sentiment, SPDR Gold Trust holdings, the world's largest gold-backed exchange-traded fund, rose 0.2% to 1,119.05 tonnes on Wednesday. Palladium rose 0.4% to $1,943.34 per ounce and platinum gained 1.4% to $830.21, while silver inched down 0.1% to $17.29.
Originally posted on Deccan Herald
The financial market is crumbling and EVERYONE will be affected. Only those who know what's going on and PREPARE will survive... dare we say thrive. Our 7 Simple Action Items to Protect Your Bank Account will give you the tools you need to make informed decisions to protect yourself and the ones you love.
