Gold extends gains on recession fears, China-U.S. tensions
Published by
ScrapPrices
Published on August 02,2022 07:00 AM Metals
Gold rose for a fifth straight session on Tuesday to its highest level in about a month as China-U.S. tensions and fears of a possible recession in America burnished bullion's safe-haven appeal.
Gold extends gains on recession fears, China-U.S. tensions

Aug 2 (Reuters) - Gold rose for a fifth straight session on Tuesday to its highest level in about a month as China-U.S. tensions and fears of a possible recession in America burnished bullion's safe-haven appeal.

Spot gold was up 0.2% at $1,775.59 per ounce by 12:11 p.m. EDT (1611 GMT). U.S. gold futures gained 0.4% to $1,794.50.

Expectations of toned-down rate hikes and a clear slowdown in the U.S. economy have significantly supported gold, said David Meger, director of metals trading at High Ridge Futures.

"The visit from Nancy Pelosi to Taiwan, increasing tensions between the United States and China, is an additional supporting factor for gold," Meger added.

U.S. House of Representatives Speaker Nancy Pelosi arrived in Chinese-claimed Taiwan aboard a U.S. military aircraft late on Tuesday, the first such visit in 25 years and one that risks pushing relations between Washington and Beijing to a new low.

Gold is considered as a safe store of value during economic and geo-political uncertainties and typically does well when interest rates are low or near zero.

While recent economic data has raised bets that U.S. interest rates could peak early next year, San Francisco Fed President Mary Daly said the central bank's work of bringing down inflation is "nowhere near" almost done.

Daly added that Fed officials are "still resolute and completely united" in the task of achieving price stability. 

The U.S. central bank last month raised its benchmark interest rate by three-quarters of a percentage point for a second straight meeting.

"The next big test (for gold prices) to the upside falls around $1,800, although it could see some resistance around $1,780," Craig Erlam, senior market analyst at OANDA, said in a note.

Spot silver was 0.6% lower at $20.21 per ounce.

Platinum rose 0.6% to $912.33, while palladium fell 4.3% to $2,097.66.

MORE METALS NEWS
August 12,2022 08:00 AM
Slowing economic growth is weighing on industrial metals prices but zinc and aluminium are likely to outperform if sky-high energy prices force European smelters to cut output further, leading to larger shortages.
August 11,2022 07:00 AM
Speculators in the copper market, viewed as an indicator of the health of the economy, are betting a global downturn means the metal used in power and construction has further to fall, despite its recent rebound.
August 10,2022 08:00 AM
Shouting over the clanging of machinery, Gerd Roeders is reluctantly preparing for the temporary shutdown of his German aluminium foundry to survive Europe's growing gas crunch.