Gold holds firm near 9-year peak as coronavirus concerns offset positive China data
Gold prices declined but held firm near a 9-year peak, as concerns over rising coronavirus cases and deteriorating U.S.-China relations offset upbeat Chinese economic data.
Spot gold eased 0.2 percent at $1,806.23 per ounce by 0927 GMT, having hit a high of $1,818.09 last week, its highest since September 2011. U.S. gold futures were 0.4 percent lower at $1,807.15.
Market sentiment weakened on worries that a second wave of coronavirus infections would trigger a return to restrictions on business activity that threaten economic growth. Recently, coronavirus cases surged in the United States, Australia, and Japan.
Additionally, worries about a wide-ranging dispute between the United States and China over the control of advanced technologies and the protection of civil liberties in Hong Kong further dented investor risk appetite.
China’s economy grew 3.2 percent in the second quarter from a year earlier, recovering from a record contraction as lockdown measures ended and policymakers stepped up stimulus to combat the impact from the coronavirus crisis. But separate data showed retail sales fell for a fifth straight month as shops, restaurants and other crowded places remained closed during the pandemic.
U.S. Secretary of State Mike Pompeo stated that the United States would impose visa restrictions on Chinese firms like Huawei Technologies Co Ltd that he accused of facilitating human-rights violations. Meanwhile, President Donald Trump has not ruled out additional sanctions on top Chinese officials over Beijing’s crackdown in Hong Kong.
Investors now await the European Central Bank policy decision due later in the day, which is all but certain to keep policy on hold that would keep pressure on political leaders to agree on a recovery plan at a Friday-Saturday conference in Brussels.