Gold prices have shown their highest level in at least past 6-years on Tuesday. Most investors backed off from more sensitive assets because of concerns surrounding Hong Kong protests and the collapse of the Argentine currency following fears of a Global Economic Slowdown. The spot gold rose 0.3% to 1515.56 U.S dollars/ ounce at 0518 GMT, after hitting its highest level since April 2013 at 1518.03 U.S dollars. The U.S gold futures rose 0.6% to 1,526.90 U.S dollars/ ounce. Hong Kong has one of the busiest airports in the world and it was shut down on Monday. The protests started at a bill that would allow suspects to be handed over to China for trial. The world fears of a possible return of interventionist policies dominated the Argentine market after President Mauricio Macri lost a margin beyond expectations in the presidential primaries.
On Wednesday, the gold prices fell after the United States postponed the imposition of customs duties on some Chinese imports. It will cause ease of trade concerns, but the political uncertainty and continued concerns regarding global growth curbed losses of the yellow metal. The spot gold was down 0.3% at 1497.17 U.S dollars/ ounce. The U.S gold futures fell 0.2% to 1,510.70 U.S dollars/ ounce. An economist at the National Bank of Australia, John Sharma said, “The easing of trade tensions and geopolitical risks has provided the markets with some hope which has supported stocks, and because of this there is a brief decline in gold prices”.
Sharma added, “But the trade dispute remains unresolved. The geopolitical risks in Hong Kong, and global growth trends, as we expect at least another” rate cut “by the US Federal Reserve, are all supporting gold”. It is noteworthy that the U.S President Donald Trump backed down from a September 1 deadline on Tuesday to impose a 10% tariff on the rest of China’s imports. It will delay tariffs on cell phones, laptops, and other consumer goods, hopefully, to lessen the impact on U.S holiday sales. The postponement of the trade dispute between the world’s 2 largest economies provided relief to financial markets.