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Gold forges file excessive as buyers rush into safe-haven commodity

LONDON: Gold soared to a file excessive on Monday as buyers rushed into the safe-haven commodity on considerations about heightened China-US tensions, a spike in virus infections and a scarcity of progress on a brand new stimulus invoice in Washington.

“Always a sign of trouble, gold continued its red hot streak on Monday, the safe haven commodity looking mighty attractive after another troubling weekend of COVID-19 and US-China headlines,” stated Spreadex analyst Connor Campbell.

With huge financial easing measures put in place by the Federal Reserve additionally pushing the greenback decrease in opposition to most different currencies, gold is flying, with the spot value hitting an all-time excessive of $1,944.71 per ounce, properly above its earlier file of $1,921.18 seen in 2011. It later pulled again considerably.

Relations between the world’s two superpowers in the meantime took one other detrimental flip, denting investor sentiment on inventory markets.

The American flag was lowered on the US consulate in Chengdu and Chinese authorities entered the constructing, as Beijing carried out a Cold War-style retaliatory closure of the mission.

Tete-a-tete

Relations have deteriorated in current weeks in an intensifying standoff between Washington and Beijing, with the Chengdu mission ordered to close in retaliation for the pressured shutdown of the Chinese consulate in Houston, Texas.

“Technically, the superpowers are all-square in this specific tete-a-tete – but investors are worried about what comes next,” famous Campbell.

At the identical time, after months of wholesome rallies throughout fairness markets — fuelled by trillions of {dollars} in authorities and central financial institution help — merchants are starting to step again as they weigh the long-term financial affect of the coronavirus.

Eyes are on the Fed’s coverage assembly this week, with some predicting additional measures to spice up the economic system — presumably detrimental rates of interest — that might put extra strain on the greenback and ship bullion above $2,000.

There are additionally considerations {that a} worse-than-forecast studying on second-quarter US gross home product might spark one other greenback sell-off.

The dollar was additionally down in opposition to most different currencies, with the euro at its highest since September 2018.

Equities blended

Stock markets have been blended as buyers fret over the affect of the virus on the economic system, with London falling and Paris flatlining.

Frankfurt nevertheless rose on a key survey exhibiting that German enterprise confidence rose for the third month in a row in July, as Europe’s high economic system bounced again from coronavirus lockdowns.

In Asia, Hong Kong, Tokyo, Singapore, Mumbai and Wellington have been all within the purple, whereas Shanghai, Sydney, Seoul and Jakarta have been greater.

Investors are additionally rising involved about sluggish progress on a brand new US stimulus programme.

Key figures round 1030 GMT

Gold: UP 2.Zero % at $1,940.15 per ounce

London – FTSE 100: DOWN 0.2 % at 6,111.62 factors

Frankfurt – DAX 30: UP 0.Three % at 12,878.37

Paris – CAC 40: FLAT at 4,953.42

EURO STOXX 50: FLAT at 3,312.67

Tokyo – Nikkei 225: DOWN 0.2 % at 22,715.85 (shut)

Hong Kong – Hang Seng: DOWN 0.Four % at 24,603.26 (shut)

Shanghai – Composite: UP 0.Three % at 3,205.23 (shut)

New York – Dow: DOWN 0.7 % at 26,469.89 (shut)

Euro/greenback: UP at $1.1711 from $1.1656 at 2100 GMT

Dollar/yen: DOWN at 105.42 yen from 106.14 yen

Pound/greenback: UP at $1.2832 from $1.2794

Euro/pound: UP at 91.25 pence from 91.10

West Texas Intermediate: DOWN 0.1 % at $41.24 per barrel

Brent North Sea crude: DOWN 0.1 % at $43.29

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