May 4, 2020 / 3:14 PM / a month ago

PRECIOUS-Gold gains as investors seek safety amid U.S.-China tensions

 (Adds comment, updates prices)
    * SPDR gold holdings rose 1.1% on Friday 
    * Two top Swiss gold refineries reopen
    * U.S. factory orders post record decline in March
    * For an interactive graphic tracking the global spread,
open tmsnrt.rs/3aIRuz7
 in an external browser

    By Eileen Soreng
    May 4 (Reuters) - Gold rose on Monday as brewing tensions
between the United Sates and China over the novel coronavirus
outbreak kindled fears of a new trade war and had investors
seeking safe havens.
    Spot gold        gained 0.4% to $1,705.62 an ounce by 1:45
p.m. EDT (1745 GMT). U.S. gold futures         settled 0.7%
higher at $1,713.30.
    "There's flight to safety because equities look weak as it
is unknown how this is going to play out," said Bob Haberkorn,
senior market strategist at RJO Futures. "There probably are
going to be a lot of issues coming up over the next couple of
months with China, and rest of the world due to this virus."
    Global stock markets fell on concerns U.S.-Chinese bickering
over the origin of the outbreak will ignite a new trade war.
           
    Britain said on Monday that China has questions to answer
over the information it shared about the outbreak.             
    U.S. Secretary of State Mike Pompeo said on Sunday there was
evidence the disease emerged from a Chinese lab, but did not
dispute U.S. intelligence agencies' conclusion that it was not
man-made.              
    "Given the relative stability of global COVID-19 cases
worldwide and the gradual reopening of economies, gold needs a
fresh impetus to rally higher," OCBC Bank said in a note.
    "Renewed U.S.-China trade hostilities may prove to be the
catalyst, but if it does not materialise, we see it challenging
for gold to rally from here."
    Safe haven gold has risen 12% this year on the back of
massive stimulus measures unleashed by global central banks to
ease the economic hit from the pandemic.             
             
    In the latest evidence of the economic toll, a report showed
new orders for U.S.-made goods fell more than expected in March
and could sink further.             
    Easing concerns over global bullion supply chains being
strained, which helped drive prices in New York and London
further apart than they have been in decades, two of the world's
biggest gold refiners, Valcambi and Argor-Heraeus, said they
were restoring full operations.             
    Elsewhere, auto-catalyst metal palladium        dipped 2.5%
to $1,851.76 per ounce, having earlier hit an over one-month low
of $1,824.28.
    The state of the automobile sector, which typically accounts
for over 80% of world palladium demand, continues to undermine
sentiment, INTL FCStone analyst Rhona O'Connell said in a note. 
    Global car sales have slumped due to measures to contain the
pandemic.                          
    Platinum        rose 0.1% to $760.62 and silver        shed
1.1% to $14.77.

 (Reporting by Eileen Soreng in Bengaluru; Editing by Lisa
Shumaker and Marguerita Choy)
  
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