Fundamental Comment

Safety demand pushes gold to new record high

Safety demand pushes gold to new record high

Gold prices rose 1.3 percent on Wednesday to the highest level in more than six years in the absence of any signs of easing tense in the trade war between the two largest economies, which continued to trigger safety demand.  

As of 10:14 GMT, spot gold soared to a new high at $1495.47 per ounce, marking the highest level since April 2013. 

The trade war escalated between the two largest economies after the U.S president Donald Trump imposed more tariffs on Chinese imports.  

The Chinese side responded On Monday by allowing its currency to fall below seven yuan to the dollar, a morally significant level, prompting Washington to classify Beijing as a currency manipulator. 

Larry Kudlow, White House economic adviser, said that the administration of U.S President wants to continue trade talks with the Chinese side as they are planning to host in September a Chinese delegator. 

A member of the Federal Reserve said that the most suitable action right now is to “wait and see” for the upcoming data to determine whether to cut the interest rates again or not in next month’s meeting. 

Both American bond yields and dollar would come under pressure because of U.S low interest rate, while should lead in the end to higher demand on the non-yielding bullions. 

The dollar index rose about 0.10 percent to 97.532, following its rebound the previous session from a two-week low of 96.98.

SPDR Gold Trust, the world's largest gold-backed investment fund, rose 0.21 percent to 836.92 tones on Tuesday. 

Regarding other precious metals, silver was up by 2.35 percent at $16.83 per ounce, the highest level since June last year.  

Platinum segmented 0.88 percent to $860.65 per ounce and palladium lost some of its gains as it traded at $1,423.90 per ounce.

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