Gold tries to hit multi-year high again

The trade dispute between the USA and China is intensifying. After China passed new security laws for Hong Kong, new threats of sanctions from the United States flared up. But the Chinese response was not long in coming. Chinese government officials have urged state farms to temporarily suspend the purchase of some American agricultural goods, including pork and soybeans. The uncertainty about the progress of the conflict supports the gold price as a safe haven.

 

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The “normalization” of economic life after the Corona crisis is advancing in many countries, but is causing profit troubles at the troy ounce. Therefore, the first breakout from the consolidation zone between $ 1,680 and $ 1,730 failed. Now the troy ounce is making a second attempt. It can easily leave the range at around $ 1,750. Recently, the weak dollar has also had a positive impact on the gold price. Against the euro, the greenback fell back to $ 1.11 per euro. Since gold is quoted in dollars, the precious metal becomes cheaper for international investors if the dollar falls.

Gold is supported by the high demand of ETF investors. They asked the troy ounce in the Corona crisis much more strongly, the trend continues until May. Demand from the US futures market is at the lowest level since summer 2019, no sign of the gold market overheating. In addition, central banks, which are often major gold buyers, are currently holding back. This group of buyers reduced their activities by ten percent in the first quarter.