Gold Breaks $1,900/oz Barrier As Sino-US Row Drives Flight To Safety

Global equities took a beating as China-US tensions intensified, while stalled stimulus talks in Washington fuelled fears for the economy; eurozone business growth turns positive in July

Safe haven gold pierced the $1,900 per ounce ceiling on Friday for the first time since 2011 as a worsening US-China row added to fears over the hit to a global economy already reeling from the coronavirus pandemic.

Spot gold climbed 0.9% to $1,902.99 per ounce by 10:47am, having earlier hit its highest since September 2011 at $$1,905.99.

US gold futures rose 0.6% to $1,901.00 per ounce. In yet another escalation, China ordered the

United States to close its consulate in the city of Chengdu, responding to a US demand for China to close its Houston consulate.

This hammered risk sentiment and sent the dollar index to a two-year trough.

Further bolstering bullion’s appeal was the constant surge in COVID-19 cases, with the US tally crossing over 4 million on Thursday and global cases breaching 15.58 million.

Non-yielding gold has surged 24% this year, underpinned by low interest rates and stimulus from central banks, which benefits bullion since it is a perceived hedge against inflation and currency debasement.

Silver rose 0.3% to $22.79 per ounce, and was up over 18% for the week, its best since 1987, bolstered by hopes for a revival in industrial activity.

Meanwhile, global equities took a beating on Friday as China-US tensions intensified, while stalled stimulus talks in Washington fuelled fears for the economy, traders said. Lingering worries about the impact on businesses of fresh coronavirus outbreaks helped trigger major profit-taking, overshadowing a batch of bright data in Europe.