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Gold ends higher as global angst knocks stocks, bond yields down

Mon Aug 12 2019

 

Gold futures finished higher Monday, near a six-year peak above $1,500-an-ounce set last week, as the U.S.-China trade battle showed few signs of letting up, and as demonstrations in Hong Kong heightened fears about the health of global markets and economies.

 

December gold GCZ19, +1.17%  on Comex rose $8.70, or 0.6%, to $1,517.20 an ounce, while September silver SIU19, +1.90%  added 14 cent, or 0.8%, to end at $17.071 an ounce.

 

“Gold is thriving in the current environment of central bank easing, risk aversion, recession risks, low inflation and even a slightly softer dollar this month. It’s already soared back above $1,500 for the first time in more than six years and it’s not yet losing momentum,” said Craig Erlam, senior market analyst at Oanda, in a note.

 

Goldman Sachs, in a Sunday note, said the U.S.-China trade war is having a bigger effect on the U.S. economy than they had expected and warned that recession risks had risen.

 

The yellow metal ended with a minor loss on Friday, but logged a 3.5% weekly rise, the strongest since June 21. Stock-market volatility around U.S.-China trade tensions were credited with lifting haven assets, including gold. The potential for early elections in Italy and continued worries over protests in Hong Kong, have also provided support.

 

Chinese authorities condemned weekend protests as “the first signs of terrorism” and vowed a crackdown on demonstrators. Authorities canceled outgoing flights from the city’s airport after it was thronged by protesters.

 

Erlam said it could be argued, however, that the bullish gold trade is becoming “a little crowded.” Until momentum starts to wane, however, “there’s every chance it will continue to thrive,” he said. “Especially if central banks continue to facilitate it with more easing heading into year-end.”

 

In other metals trade, October platinum PLV19, +0.56% fell 10 cents, or less than 0.1%, to $863.70 an ounce, while September palladium PAU19, +0.20%  rose $11.50, or 0.8%, to $1,430.80 an ounce.

 

September copper HGU19, +0.21%  edged 0.4 cent, or 0.2% lower, to settle at $2.585 a pound.

 

Source: https://www.marketwatch.com