Gold markets: US-China tensions in focus

One kilogram gold bars are displayed for a photograph at the YLG Bullion International headquarters in Thailand on January 13, 2016. Dario Pignatelli | Bloomberg | Getty Images Gold inched up on Friday and was on track for its second monthly gain as deteriorating U.S.-China ties in a world reeling […]

One kilogram gold bars are displayed for a photograph at the YLG Bullion International headquarters in Thailand on January 13, 2016.

Dario Pignatelli | Bloomberg | Getty Images

Gold inched up on Friday and was on track for its second monthly gain as deteriorating U.S.-China ties in a world reeling from the coronavirus pandemic rattled investors and fueled demand for the safe-haven metal.

Spot gold was up 0.1% at $1,719.47 per ounce by 0342 GMT. U.S. gold futures rose 0.3% to $1,717.60.

However, the metal was down for the week, having dropped to a two-week low on Wednesday as easing lockdown measures around the world boosted hopes of an economic recovery.

“Gold remains wedged between potentially positive economic developments that have been dragging prices lower, and a rise in geopolitical tensions with China over Hong Kong,” said Cameron Alexander, an analyst with Refinitiv-owned metals consultancy GFMS.

Market participants now await the U.S. response to Beijing tightening control over Hong Kong, after China’s parliament approved a national security legislation for the city.

U.S. President Donald Trump, who has vowed a tough response, will hold a news conference later in the day. 

Worsening U.S.-China relations have further added to fears about a global economic recovery, helping the metal rise 2% so far this month.

Central banks increasing liquidity in financial markets, low interest rates and rising money supply are bullish for gold in the longer term, Phillip Futures wrote in a note.

Among other metals, silver fell 0.2% to $17.39 an ounce, but was poised for its biggest monthly gain since June 2016.

Palladium gained 0.3% to $1,937.91 per ounce, but was set for a third straight monthly fall. Platinum declined 0.8% to $831.89, but was on track for a second monthly gain.

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