Gold Price Soars to New High Above $1,500 per Ounce

Gold Price Soars to New High Above $1,500 per Ounce

Gold prices jumped in futures trade on Wednesday as the trade conflict between the U.S. and China continued to drag, thus boosting the demand for the safe-haven asset.

"Looking at the interest rates and general trajectory of yields and uncertainty over the trade war, gold has room to move higher from here", London Capital Group head of research Jasper Lawler told Kitco News. United States gold futures settled up 0.52% at $1,484.20. "Increasingly fiery rhetoric out of Washington and Beijing is fuelling worries that the conflict will amount to a longer-term headwind for global growth", Ilya Spivak, senior currency strategist with DailyFx said.

Trade tensions have escalated since U.S. President Donald Trump threatened last week to impose tariffs on more Chinese imports.


"Gold fever" could be sustained by factors including "the current stage of the economic cycle, the scarcity of safe-haven assets and central bank purchases", analysts at Societe Generale said in a note. Prices of silver also rose by Rs 650 to Rs 43,670 per kilogram.

Overall, the price of gold has climbed more than 18% since the beginning of the year.

Other precious metals, except palladium, latched on to gold's rally, with silver breaking above the $17 an ounce mark for the first time in more than a year.


The worsening Sino-US trade talks may lead to further rate cuts from US Fed to support lingering economy, he added.

New Zealand's central bank is expected to cut interest rates to a record low of 1.25% on Wednesday, but strong unemployment data released on Tuesday suggests the economy may not be as bad as some had speculated. -China trade tensions boosted safe-haven demand.

In addition to the challenges thrown up by the trade war, there are other risks.


However, Goldman Sachs said it no longer expects a trade deal to be struck before the November 2020 USA presidential election, while Morgan Stanley warned that more tit-for-tat tariffs could tip the world economy into recession by the middle of next year.

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