Gold climbed close to a nine year high on Thursday morning in Asia, with sluggish economic recovery and rising political tensions between the U.S. and China driving investors to the safe-haven asset.
Gold futures were up by 0.15% to $1,867.85, not far below its record high of $1,920.70 in 2011. Stocks, which usually move in the opposite direction to gold, were down on Thursday.
“The closer gold gets to its record high the stronger the magnetic field will become and that could see it challenge that level before long,” Analyst said.
Rising U.S.-China political tensions contributed further to gold gains. The U.S. ordered China to close its consulate in Houston, Texas by Friday with U.S. Secretary of State Mike Pompeo accusing China of intellectual property theft. In a retaliatory move, China’s foreign ministry condemned the move on Twitter as “political provocation”.
Meanwhile, U.S. economy recovery from COVID-19 remains slow and the relentless rise of global cases continues. The number topped 15 million as of July 23, according to Johns Hopkins University data. Congress also continues its debate over further stimulus measures, with some measures set to expire at the end of July.