Gold’s haven appeal boosted the metal to a more than six-year high on Monday, as an escalating U.S.-China trade fight sparked a selloff in assets perceived as risky.
Gold, now up about 15% from its low of 2019, has surged over recent sessions after President Donald Trump intensified a trade fight with China by announcing additional tariffs[1] on Chinese goods and China pledged retaliation.
Read: Why Trump’s tariff tweet sparked market mayhem[2]
China’s yuan currency USDCNH, +1.7559%[3] on Monday fell to its lowest level in more than a decade, breaching the key 7-to-the-dollar level. Investors took that as a sign Beijing could allow further weakness, with the potential to further intensify trade tensions.
Read: What a falling Chinese yuan means for the stock market and the trade war[4]
Gold for December delivery GCZ19, +1.38%[5] on Comex rose $19, or 1.3%, to $1,464.60 an ounce. That was the highest most-active contract finish since May 9, 2013, according to Dow Jones market data. Prices ended about 2.7% higher for last week.
“The yellow metal is on the verge of a making for a run towards the $1,500 an ounce level and after that there is not much resistance until the $1,650 region,” said Edward Moya, senior market analyst at Oanda. “The trade war, a negative global interest-rate environment and weak corporate earnings are all positive catalysts for the remainder of the summer for gold.”
September silver SIU19, +1.11%[6] — which because of its industrial use in addition to haven status can be negatively impacted by the trade news — added 12 cents, or 0.8%, to $16.34 an ounce Monday. It posted a loss of 0.8% for last week, however.
Read: Why gold initially fell after the Fed decision to cut interest rates[7]
Gold gained as the Dow Jones Industrial Average DJIA, -3.19%[8] fell more than 800 points, or 3.2% [9]and the S&P 500 SPX, -3.20%[10] dropped 3.2%. The Nasdaq COMP, -3.80%[11] ...