HONG KONG: The gold price has surged internationally as tensions continue to soar between US-China and a spike in COVID-19 infections across the globe.
With vast monetary easing steps put in place by the Federal Reserve pushing the dollar lower against most other currencies, gold is flying, hitting an all-time high of $1,944.71, well above its previous record of $1,921.18 seen in 2011.
Eyes are on the Fed’s next policy meeting this week, with some predicting further steps to increase the economy — possibly negative interest rates — that could put more pressure on the dollar and send bullion above $2,000.
There are also concerns that a worse-than-forecast reading on second-quarter US gross domestic product could spark another dollar sell-off.
While the weak dollar has been a key catalyst for the metal’s advance, gold has also been boosted by its attractiveness as a haven in times of turmoil with China-US relations souring by the day.
The greenback was down against most other currencies, with the euro at its highest since September 2018, while higher-yielding units such as the South Korean won and Indonesian rupiah were also up.
Stock markets were mostly up but with little conviction as investors fret over the impact of the virus on the economy.
Shanghai was slightly higher, having suffered big losses last week as China and the US closed consulates in Chengdu and Houston, ramping up tensions between the superpowers.
Sydney was up 0.2%, while Singapore and Jakarta each added 0.3%, though Seoul climbed more than one percent and Taipei jumped more than two percent. Tokyo, Hong Kong and Mumbai drifted lower.
Investors are growing concerned about lawmakers’ slow progress on a new US stimulus program, with Republicans still to present their proposals worth around $1 trillion, which is less than a third of the plan set out by Democrats.
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