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Gold rises on Friday as United States-China tensions return

2019-07-12 11:45 am | Resource: NEWS | No Views : 42

Gold rises on Friday as US-China tensions return

Gold rose on Friday and was on its way to a weekly gain, rallying above $ 1,400 as renewed trade tensions between China and the United States amid global economic tensions and the prospect of a rate cut by the US Federal Reserve boosted demand for safe haven.

Federal Reserve Chairman Jerome Powell said Thursday that the US central bank is ready to cut interest rates to keep the economy in good shape. He did not say specifically that the interest rate cut could come at the July meeting, but investors took his two-day testimony as strong evidence of it.

Michael McCarthy, chief market strategist at CMC Markets, said: "We have a weakness in the US dollar, tensions in the Middle East, and once again, the long trade conflict between the US and China, all of which are supportive."

Trade concerns continued after US President Donald Trump accused China of violating its promise to buy agricultural products from US farmers. "They did not buy agricultural products from our great farmers who said they would do it," the president said on Twitter. "Hopefully they will start soon."

China punishes US companies involved in Taiwan arms sales

China will punish any US company linked to arms sales to Taiwan, media reported on Friday. Chinese Foreign Minister Wang Yi said that arms sales hurt the sovereignty and national security of the country. He said they had carried out "total disregard" for China and that the United States should not have formal relations with Taiwan.

Wang's comments come two days after the US State Department approved a $ 2.2 billion military sale to Taiwan. The deal with the Taipei Economic and Cultural Representation Office includes 108 M1A2T Abrams tanks, missiles and related equipment as well as support. The United States later defended the sale, saying it complied with the Taiwan Relations Act, which allowed it to supply the country with defensive materials "as much as may be necessary to enable Taiwan to maintain sufficient self-defense capabilities."

Gold Trading
  • Spot gold rose 0.3 per cent to $ 1,407.61 an ounce.
  • Gold futures in the US rose 0.2 per cent to $ 1,409.35 an ounce.

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