Gold passes $US1900/oz as US-China tensions escalate

Gold’s uphill momentum has persisted for the sixth consecutive week, soaring above $US1900 ($2675) an ounce on Friday last week.

The safe-haven metal closed at $US1901.95 on Friday, just $US18 shy of its all-time high in September 2011.

This was the first time that gold pierced through “the Gateway to 2000” threshold since 2011 as fears over worsening US-China row added fuel to the COVID-19-led economic slump.

A cold war between the United States and China accelerated last week as the former’s State Department ordered China to shut down its Houston consulate “to protect American intellectual property and Americans’ private information”.

China retaliated by ordering the United States to shut its consulate in Chengdu.

The number of COVID-19 cases has also continued to surge, reaching four million cases in the United States. Eighteen American states also set their single day records last week.

“What’s far more important now is how gold closes this month. Because that sets up the probability of what it should do in August,” Investing.com’s Tom Luongo said.

“Because if gold were to close July where it closed this week, $US1901.15, versus a high of $US1906.68 and a low of $US1757.71 then there is a 90 per cent chance of gold breaking July’s high and just a 1.2 per cent chance of gold breaking the July low.”

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