Gold price soars to 9-year high amid escalating China-US tensions and pandemic

Source: Global Times Published: 2020/7/23 13:53:44

A customer shops for gold ornaments at a jewelry shop in Yangon, Myanmar, Aug. 13, 2019. Myanmar's domestic gold price edged higher with around 1.23 million kyats (816 U.S. dollars) per tical on Tuesday, U Aung San Win, vice-chairman of Myanmar Entrepreneurs Association, told Xinhua. (Xinhua/U Aung)

The international spot gold price hit $1,868.90 per ounce and silver $22.70 per ounce at 1 pm on Thursday (Beijing time) as risk-aversion sentiment soars amid escalating China-US tensions and the continued spread of COVID-19 overseas.

The gold price has risen 21 percent so far this year, hitting its highest point since September 2011 and approaching a record high of $1,920.80 per ounce.

The silver price has grown around 17 percent, now at its highest level since September 2016.

Driven by the international gold price, domestic spot gold and gold future prices both exceeded 410 yuan per gram ($1,672.80 per ounce) on Thursday. The price of spot gold at the Shanghai Gold Exchange was up 0.5 percent to 412.24 yuan at 1 pm, and the main contract, Au2012, was up 0.87 percent to 415.50 yuan.

Observers noted that escalating tensions between the world's two largest economies, as well as the uncertainties of the global pandemic, have pushed up metal prices.

Wan Zhe, chief economist at the China National Gold Group Corp, said global risk-aversion sentiment has increased as many countries face great challenges in returning their economies to normalcy due to the uncertainties of the global pandemic, and some central banks are pumping liquidity into the market which may depreciate cash values.

On Wednesday, the US ordered the Chinese Consulate General in Houston to close in an unprecedented escalation of tensions in bilateral diplomatic relations, sending a shockwave into financial markets.

By 1 pm, the Shanghai Composite Index had edged down 1.03 percent to 3,298.28 yuan ($471), the Shenzhen Component Stock Index had slid 0.92 percent to 13,530.86 yuan, and the tech-heavy ChiNext board had risen 0.08 percent to 2,771.30 yuan.

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