Gold price edges up as US-Sino tensions rise
Bengaluru — Gold ticked higher on Tuesday as brewing Sino-US tensions over Hong Kong lifted demand for the safe-haven metal, though easing coronavirus-induced lockdown restrictions supported equities and capped bullion’s gains.
Spot gold rose 0.2% to $1,732.38 an ounce by 2.41am GMT. US gold futures were down 0.1% to $1,733.50.
“The key supportive factor for the (gold) market is rising tensions between China and the US; and if we see a further escalation, we would see another move higher in gold,” said ING analyst Warren Patterson.
China’s foreign ministry office in Hong Kong and the city’s security chief defended proposed security laws by describing some acts in mass pro-democracy protests last year as terrorism.
The proposed legislation could lead to US sanctions on Hong Kong and China, and threaten the city’s status as a financial hub, White House national security adviser Robert O’Brien said on Sunday.
Gold is seen as a safe-haven asset during political and economic uncertainties. One of the factors keeping a cap on gold prices is the easing of lockdown restrictions, said Patterson, adding that people are getting more positive on recovery”.
Asian shares gained ground on expectations of an economic recovery and as investors focused on more stimulus in China.
Helping risk-on sentiment, a survey showed on Monday German business morale rebounded in May, recovering from its most dramatic fall on record the previous month.
Market participants are now awaiting the US consumer confidence data due at 2pm GMT for more clues about the health of the world’s top economy.
Among other precious metals, palladium gained 1.1% to $2,013.98 an ounce, platinum added 1.3% at $849.32, and silver rose 0.8% to $17.34.
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