Gold price eyes 7-year high on fears of renewed trade war, second coronavirus wave

Dubai-UAR (May 17)  Panic stoked by fears of re-escalation of US-China trade has propelled gold to a wave high of above $1745 per ounce, pivoting it for a seven-year peak.

The yellow metal's four days of relentless rally has also been abetted by fears  over a second wave of Covid-19 outbreak as global economies begin to reopen.

China and South Korea are on alert once again as they face a rising number of new infections. In the US, the state of Texas recorded its largest daily increase in cases and deaths since the start of outbreak.

Such a grim possibility of another surge in pandemic  cases, combined with weak economic data coming from major markets like the US, raises more uncertainties for a near-term recovery, making safe-haven assets like gold more attractive to investors, precious metal analystd said.

Bullion rose 0.9 per cent to $1,747.94 an ounce as of Friday, approaching its peak in April when the price was at a seven-year high. Gold futures for June delivery traded 1.1 per cent higher at $1,759.50 an ounce on the Comex in New York.

The anticipation of further fiscal and monetary measures will likely fuel further demand for precious metals, as they have in the past.

"Everybody must have realized it, but it's just more evidence that the reality is this is a pretty bleak economic picture right now," Phil Streible, chief market strategist for Blue Line Futures LLC, said.

"People are continuing to pile into gold because that weak economic picture is going to continue to drive interest rates lower," he said.

Prices are having a long-awaited breakout moment as market anxiety mounts, analysts said.

KHALEEJ-TIMES