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PRECIOUS-Gold smashes $1,900/oz barrier as Sino-U.S. row drives flight to safety

Published 25/07/2020, 01:10 am
© Reuters.
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* Over 4 million Americans infected with COVID-19

* Gold up 5% so far for the week

* Silver on track for best week in over three decades

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)

By Eileen Soreng

July 24 (Reuters) - Safe-haven gold pierced the $1,900 per ounce ceiling on Friday for the first time since 2011 as a worsening U.S.-China row added to fears over the hit to a global economy already reeling from the coronavirus pandemic.

Spot gold XAU= climbed 0.7% to $1,899.68 per ounce by 2:00 p.m. EDT (1800 GMT), after hitting $1,905.99, the highest since September 2011.

Prices were set to gain 5% for the week, their best since week ended March 27.

U.S. gold futures GCv1 settled up 0.4% at $1,897.5.

"Concerns about more global economic slowing due to the increasingly acerbic U.S.-China spat is seen as likely to keep global government and monetary support going even longer," said Tai Wong, head of base and precious metals derivatives trading at BMO.

In yet another escalation, China ordered the United States to close its consulate in the city of Chengdu, responding to a U.S. demand for China to close its Houston consulate. hammered risk sentiment and sent the dollar .DXY to a two-year trough. .N USD/

Further bolstering bullion's appeal was the constant surge in COVID-19 cases, with the U.S. tally crossing over 4 million and global infections breaching 15.58 million. only thing I can see to take the wind out of gold's sails is the rapid development of a coronavirus vaccine, because until that happens, all this uncertainty (in markets) will stay with us," said StoneX analyst Rhona O'Connell.

Non-yielding gold has surged over 25% this year, underpinned by low interest rates and stimulus from central banks.

Silver XAG= fell 0.2% to $22.67 per ounce, but was up over 17% for the week, its best since 1987, bolstered by hopes for a revival in industrial activity.

"Investors are perceiving silver as being undervalued compared to gold and that is why silver has really surged," said Kitco Metals senior analyst Jim Wyckoff, adding that the next price target would be $25.

Platinum XPT= rose 1.3% to $916.97 and palladium XPD= climbed 4.3% to $2,216.31.

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https://tmsnrt.rs/30K2Rm3 Silver's resurgence

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