Gold Up on Back of Souring U.S.-China Relations
Gold was up on Monday morning in Asia, continuing its gains from Friday to touch its highest point since October 2012.
A souring U.S.-China relationship, as well as other bleak news, led investors to turn to the safe-haven yellow metal. White House trade advisor Peter Navarro was the latest U.S. official to ratchet up the blame game after he suggested that Beijing sent "hundreds of thousands of Chinese on aircraft to Milan, New York and around the world" to spread the virus after hiding it from the world for two months.
Gold futures were up 0.71% at $1768.85 by 12:13 AM ET (5:13 AM GMT). Meanwhile stocks, which usually have an inverse relationship with gold, were also up on Monday.
On top of Navarro’s comments, U.S. President Donald Trump declared that he was “not thrilled” with the phase one U.S.-China trade deal reached in January, even after National Economic Council Director Larry Kudlow said on Friday that the two countries were still working to implement the deal.
The Trump administration added fuel to the fire by blocking chip supplies to Huawei Technologies, with investors on edge for a reported possible Chinese retaliation.
Meanwhile, U.S. Federal Reserve Chair Jerome Powell warned in a “60 Minutes” interview that the U.S. economy could shrink up to 30% in the second quarter. Although the U.S. could avoid a second Great Depression in the long run, a full recovery would depend of the development of a vaccine.
Powell also added that the Fed was willing to deploy more ammunition to aid in economic recovery if needed.