Gold rises for a third straight day as US riots grow

1 June, 2020

The gold price is rallying for a third straight day in today’s trading session on the back of US dollar weakness as well riots in major U.S. cities caused by the death of an unarmed black man spiraled out of control which left investors heading for the precious metal as a safe haven asset.

Protesters have now set up camp in many cities in the United States over the death of George Floyd by a Minneapolis police officer, after some say, was caused by excessive force after he resisted arrest and further adds to the racial divide which is now sweeping the world’s biggest economy. in police custody, in a wave of outrage sweeping a politically and racially divided nation

Concerns about the unrest in the United States at the moment appear to be weighing on market sentiment," said Michael McCarthy, chief strategist at CMC Markets, adding that rising tensions between the world's top two economies provided further support to gold. The protests have turned into riots in many cities and now the question is this situation going to calm down or spiral out of control which will lead to further support for gold as a protective asset.

The US China trade war which has bubbled to the surface again is also likely to help the gold price and now the situation has been exacerbated by China’s decision to effectively shut down Hong Kong’s attempt for continuous autonomy by introducing a law which would allow the Chinese government to crush and dissident in Hong Kong.

US President Donald Trump has already threatened sanctions on China if they go ahead with the law against Hong Kong and although it is just words at the moment, any concrete moves by the US President will rattle financial markets and likely boost the gold price.

“What could change would be a major re-escalation of the trade war, if it involved much more punitive tariffs that required abrupt changes to supply chains. This is not something we expect as a base case, but clearly the ramping up in geopolitical tensions raises that risk,” said ABN Amro’s senior economists Bill Diviney and Arjen van Dijkhuizen. “It will be important in that environment to distinguish between aggressive rhetoric – which could nonetheless have big market impacts – and concrete policy changes that affect the macro outlook.” they added.


Source  
The market does not respond to statistics26 Mar, 2021  

The financial markets have changed a lot in the last few months. This may be too loud of a statement, but we are indeed witnessing a global change in a number of economic...

Oil, gold and interest rates12 Mar, 2021  

Earlier, we have repeatedly noted the high contribution of OPEC+ to the recovery of the oil market, which led to a fairly strong increase in oil prices. At the same time...

EUR renews growth26 Feb, 2021  

In the first three trading days of this week, we observed a weakening of the US dollar against most currencies. In particular, the British pound sterling against...


Decreased interest in risk24 Feb, 2021  

I will start today's review with the fact that the current week began with moderate sales on the stock markets of the United States and Europe. I would also like to draw...

Why did euro fall on the Fed publication?29 Jan, 2021  

Biden's new stimulus plan faces resistance from a bipartisan group. Republicans believe the overall cost of Biden's stimulus package could be reduced during...

USD correctional growth12 Jan, 2021  

The current week started with another wave of growth of the US dollar, which is largely due to the weakening of European and commodity currencies. As a result...


USD may continue to decline in 202119 Nov, 2020  

Let me remind you that earlier I already noted the statements of analysts from Morgan Stanley, who recommended getting rid of USD and paying attention...

Fed expects stock market crash12 Nov, 2020  

It's no secret that the world economy is in a stalemate. For several months, most of the world's countries have been on the verge of a financial crisis, which can only...

The collapse in oil prices27 Oct, 2020  

There is less and less optimism and this is very clearly seen in the change in risk appetite. France records more than 52,000 officially confirmed COVID-19 cases every day...