Gold climbed further as demand for the precious metal surges against a backdrop of escalating US-China tension.
The price of gold per ounce teetered between small gains and minor losses during the Asia session but seems to have stabilised around the $2,060 mark.
It rose to new record highs in the early part of the session as concerns about US-China tensions escalated. President Donald Trump issued an executive order banning transactions with the Chinese owners of TikTok – Tencent – and WeChat – ByteDance.
It came as the White House said it was ramping up efforts to purge “untrusted” Chinese apps and called the apps a “significant threat”. Asian stocks retreated which in turn helped to lift the yellow metal’s safe-haven status.
Gold has soared to new highs this week as the prospect of a second wave spooked investors. The precious metal is a safe haven asset that is able to maintain, and increase, during volatile periods. Gold is up 38.22 per cent year-on-year.
Investors are concerned the US economic recovery could be stalling due to its poor attempt to control the outbreak. Additionally, gold rose on Thursday gold rose as investors amid indecision by US lawmakers on another fiscal stimulus package, even as weekly jobless claims improved.
““Gold is surging once again after better-than-expected jobless claims, real yields resume their freefall, and as lawmakers struggle to make further progress on stimulus talks,” said Edward Moya, senior market analyst at Oanda.
Treasury Secretary Steven Mnuchin said Republicans and Democrats are still far apart on the key issues. He added that President Trump was prepared to issue an executive order if an agreement is not made before the deadline.
Analysts predict the price of gold could go even further as infections rise and geopolitical tensions continue.
“While Gold looks slightly overbought from a technical perspective, there is currently a perfect storm that could keep the rally going with only occasional small setbacks,” said Milan Cutkovic, market analyst at AxiCorp.