Gold Cuts Weekly Loss as China Sparks Safe-Haven Buying

Gold Cuts Weekly Loss as China Sparks Safe-Haven Buying

imageCommodities9 hours ago (May 22, 2020 03:47PM ET)

(C) Reuters.

By Barani Krishnan

Investing.com – China’s stirring the hornet’s nest of Hong Kong’s democracy again sent safe-haven seekers piling into gold Friday, reducing the yellow metal’s weekly losses accumulated on the back of optimism over the U.S. recovery from Covid-19.

U.S. gold futures for June settled up $13.60, or 0.8%, at $1,735.50 per ounce after China’s ruling Communist Party set in motion a controversial national security law for Hong Kong that could be a major blow to the city’s freedoms.

Spot gold, which tracks real-time trades in bullion, rose $6.02, or 0.4%, to $1,733.62 by 3:30 PM ET (19:30 GMT) after Beijing’s National People’s Congress omitted its 2020 economic target while pledging to issue 1 trillion yuan ($140 billion) of special treasury bonds to support companies and regions hit by the pandemic.

For the week, gold futures were down almost $21, or 1.2%, while bullion dipped about $10, or 0.5%.

“Gold futures have, once again, showed strength over the past week, pushing just short of the contract high of $1,789 back in March, only to fall back toward $1,735,” wrote Joshua Graves, strategist at RJO Futures in Chicago.

“It’s difficult to say whether we will be able to make new highs given the stock market strength, and the endless sideways price action over the past few months. Gold is a buy around $1,675, and a sell around $1,750 and it’s been that simple. Gold ETFs continue to expand for the 20th straight week with unrest in Hong Kong after China’s recent crackdown, and explosive federal government spending all reasons to be long gold.”

Gold Cuts Weekly Loss as China Sparks Safe-Haven Buying

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