Pure gold ore is shown on the stone floor of a mine. Picture: 123RF/PHAWAT KHOMMAI
Pure gold ore is shown on the stone floor of a mine. Picture: 123RF/PHAWAT KHOMMAI

Bengaluru — Gold rose on Monday to its highest since October 2012 as worries regarding the souring US-China relations and bleak US economic data underpinned the safe-haven metal.

Spot gold was up 0.9% at $1,756.79 per ounce by 2.43am, after rising to its highest since October 12, 2012 at $1,759.98. US gold futures gained 0.5% to $1,765.70.

The US-China “Phase 1” trade deal reached in January is not falling apart and the two countries are still working to implement it, the White House’s top economic adviser said on Friday, but President Donald Trump added that he is not “thrilled” with the agreement.

China’s commerce ministry on Sunday said it is firmly opposed to the latest rules by the US against Huawei and will take all necessary measures to safeguard Chinese firms’ rights and interests.

Underscoring the economic impact of the coronavirus epidemic, US retail sales endured a second consecutive month of record declines in April, putting the economy on track for its biggest contraction in the second quarter since the Great Depression.

A US economic recovery may stretch deep into next year and a full comeback may depend on a vaccine, the Federal Reserve chair said on Sunday night, while he outlined the likely need for three to six more months of government financial help for firms and families.

Gold tends to benefit from widespread stimulus measures as it is seen as a hedge against inflation and currency debasement, while it is also used as a safe-haven during times of economic and political uncertainties.

Authorities in China’s Wuhan tested more than 3-million residents for the coronavirus in April and May and aim to test all of the rest, state media said, as the city faces the threat of a second wave of infections.

Japan’s economy slipped into recession for the first time in 4½ years, GDP data showed, putting the nation on course for its deepest postwar slump.

Physical gold demand was tepid in most Asian centres last week with retail buying yet to see any significant recovery even as top hubs India and China eased some coronavirus-driven restrictions.

SPDR Gold Trust holdings, the world’s largest gold-backed exchange-traded fund, rose 0.8% to 1,113.78 tonnes on Friday.

Palladium slipped 0.5% to $1,892.25 per ounce. Platinum gained 0.7% to $803.19, while silver rose 2% to $16.96.