Gold was marginally down on Wednesday in Asia, reversing its earlier losses. But the yellow metal’s losses were capped by mounting COVID-19 fears on top of worsening U.S. China relations.
Gold futuresâ€¯were down by 0.11% to $1,811.35, by 11:44 PM ET (4:44 AM GMT), continuing to stay above the $1,800 mark.
The COVID-19 situation continues to worsen globally. California Governor Gavin Newsom ordered the re-imposition of social-distancing measures across the largest U.S. state on Monday.
In Asia, Tokyo announced that it will raise the COVID-19 warning to the highest level on Wednesday. Hong Kong’s strictest social distancing measures came into effect on Wednesday, with the closure of gyms and beaches across the city and fines for those without face masks on public transport. U.S. China relationships also continue to sour, keeping demand for gold strong.
Following U.S. Secretary of State Mike Pompeo’s statement on Monday calling China’s claims in the South China Sea “illegal,” President Donald Trump signed an executive order ending Hong Kong’s preferential trade status on Tuesday. The order revokes all special privileges, special economic treatments, and bans the export of sensitive technology exports.
Trump also gave the green light to U.S. sanctions against Chinese entities involved in enacting Hong Kong’s national security laws, in place since July 1.