- U.S Riots Over George Floyd Death
- U.S-China Tensions Over Hong Kong
- Slow Economic Recovery Concerns
Gold (XAUUSD) rallied in early Monday trading session as traders retreated from riskier assets into safe-havens as riots across the U.S aroused concerns over fresh economic setbacks. Copper was also up in the session as the U.S response to China’s new security law over Hong Kong failed to rattle the market.
The precious metal was up by as much as 0.75% touching highs of $1744 an ounce. The rally comes hot on the heels of Gold coming under pressure last week amidst growing concerns of increased liquidation, as traders reacted to increasing tensions on the global scene amidst slow economic growth concerns.
Protesters flooding the street in response to police brutality that led to the death of George Floyd is the latest catalyst likely to support gold prices this week. Traders are increasingly flooding into safe-haven assets as tensions continue to spiral out of control at the back of soaring tensions between the U.S and China.
A breakdown in relations comes hot on the heels of China, confirming it is to implement a new security law designed to affirm its control over Hong Kong. President Donald Trump has already reiterated plans for a strong response in response to the security law.
In response to deteriorating relations, Federal Reserve Chair, Jerome Powell, warning of a potential surge in coronavirus infections also continues to arouse concerns in the market. A second wave of infections could derail the economic recovery, something that should fuel demand for risk aversion assets such as Gold.
Copper prices also continue to edge higher as President’s Trump response towards China’s aggression on Hon Kong Failed to rattle the markets.
While the U.S is posed to eliminate special treatment for Hong Kong, it is highly unlikely that it will undermine the Phase 1 trade deal.