Gold hits 3-week high as U.S.-China dispute fuels growth concerns
Gold gained for a fourth straight day on Friday, reaching a new three-week high as rising U.S.-China trade tensions fueled continued fears that the U.S. economy affected from Covid 19 will take longer to recover.
Gold opened at $1,731.11 per ounce, after hitting its highest since April 23. The precious metal has risen nearly 2% so far this week. U.S. gold futures were steady at $1,740.20. Gold has been consolidating for weeks, finally breaking loose yesterday.
A new precious metals analysis survey showed an already dismal near-term U.S. economic outlook has eroded further. While a recovery is still projected for the second half of the year, it won’t come close to regaining the ground it lost this year. The focus now shifts to retail sales data due today that will reflect the impact of shelter-in-place orders on the U.S. consumers in April. The pandemic has hammered global growth and prompted governments to initiate massive stimulus packages to stem the economic tide.
Gold historically benefits from massive stimulus packages because it is mostly viewed as a hedge against inflation and currency devaluation. Gold holdings jumped 1.2% on Thursday – its highest in more than seven years. Meanwhile, President Trump said on Thursday the pandemic had a huge affect over his recent trade deal with China, and suggested the U.S. could even cut ties with Beijing.
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