Gold on the rise amidst new uncertainty in US-China relations
Gold saw gains in early Asian trading. The precious metal developed its earlier gains and reached its highest position since October of 2012.
By 13:13 GMT gold futures gained 0.71% and stood at US$1768.85. At the same time stocks, that tend to go in the opposite direction, saw gains as well.
Traders turned back to safe-haven investments as the relations between the United States and China. Peter Navarro - the trade advisor for the White House - stated that Chinese authorities purposefully sent “hundreds of thousands” of people to other countries in order to spread the virus and was hiding the information about COVID-19 for at least two months.
President Trump also noted, that he is “not thrilled” about the results of the first phase of the trade deal with China, which was finalized in January. On May 15 the United States also stopped chip deliveries to Huawei, effectively blocking the launch of telecom’s behemoth 5G broadband. Traders are waiting for the Chinese retaliation.
The market was also influence by the new forecast from Jerome Powell - the Chairman of the Federal Reserve He claimed, that the national economy might contract by as much as 30% in Q2. The “new Great Depression” scenario, however, is unlikely.