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Gold advances as US-China tariffs re-kindle safe-haven demand

Gold advances as US-China tariffs re-kindle safe-haven demand

Mubasher: Gold prices rose on Monday, as the trade conflict between the US and China escalated further with both sides slapping tariffs on one another’s products, which fuelled fears over a global economic downturn, boosting safe-haven demand, Reuters reported.

By 9:43 am GMT, spot gold climbed by 0.35% to $1,525.75 per ounce, while US gold futures rose by 0.20% to $1,532.50 per ounce.

“The reality of the trade war with the new tariffs being implemented over the weekend has kept a risk-off tone in markets this morning,” Australia and New Zealand (ANZ) Banking Group senior commodity strategist Daniel Hynes was quoted by Reuters.

The US implemented 15% duties on a range of Chinese products on Sunday, comprising footwear, flat-panel televisions, and smart handsets, while China imposed new levies on US crude shipments.

Escalation in the trade conflict between the world’s two biggest economies and growing worries over a global economic downturn have led the yellow metal to surge by more than $100 per ounce in August.

A private business gauge pointed to a surprise growth of China’s manufacturing activity in August, but still highlighted weak new orders and wilting business confidence amid the trade conflict between Washington and Beijing.

Global stocks sagged on Monday in response to the new round of tariffs which reignited jitters over a global economic slowdown.

US President Donald Trump said that both sides would still hold talks later this month.

Despite the high level of cynicism that those negotiations would yield any progress, “traders want to see talks restart with both parties suggesting some positive outcomes before any optimism around the progress sets in,” Hynes said.