Gold rises amid US riot-fuelled dash for safe haven
Concerns about unrest over death in police custody appear to weigh on market sentiment, analyst says
Gold prices rose on Monday as riots in major US cities rattled investors already reeling from strained Sino-US relations and boosted demand for the safe-haven metal, with a weaker dollar lending further support.
Spot gold gained 0.8% to $1,739.75 per ounce by 4.42am. US gold futures ticked up 0.1% to $1,752.60.
“Concerns about the unrest in the US at the moment appear to be weighing on market sentiment,” said Michael McCarthy, chief strategist at CMC Markets, adding that rising tensions between the world’s top two economies provide further support to gold.
Protesters have flooded the streets in the US over the death of George Floyd in police custody, in a wave of outrage sweeping a politically and racially divided nation.
The closely packed crowds and demonstrators not wearing masks have sparked fears of a resurgence of Covid-19, which has killed more than 101,000 Americans.
In Asia, China’s state media and the government of Hong Kong lashed out on Sunday at US President Donald Trump’s pledge to end Hong Kong’s special status if Beijing imposes new national security laws on the city.
Gold is often used as a safe store of value during times of political and financial uncertainty.
Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.3% to 1,123.14 tonnes on Friday, a fresh seven-year high.
Further supporting gold’s appeal, the dollar index fell 0.4% against its rivals.
Elsewhere, silver jumped 2% to $18.20 per ounce, its highest since February 26, before retreating slightly to trade 1.8% higher at $18.16.
Speculators cut their bullish positions in Comex gold and increased them in silver contracts in the week to May 26, the US Commodity Futures Trading Commission said on Friday.
Palladium rose 0.7% to $1,958.25 per ounce, while platinum declined 0.3% to $835.56.