Gold at the highest for seven and a half years

Since gold is considered a safe haven, it tends to appreciate in times of political or economic uncertainty.

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Gold reached a level more seen Monday since October 2012, boosted by the prudence of the investors concerning the revival of the economy and in a context of Sino-American tensions.

The elements explaining this increase are the same as last week, said Carsten Fritsch, analyst for Commerzbank, who quotes “doubts about an (rapid) economic recovery, reinforced by Friday’s disastrous US economic figures, persistent speculation on negative interest rates in the United States, the flow of cheap money, the rapid increase in national debt levels and fears of a new trade conflict between the United States and China. ”

US industrial production fell 11.2% in April, the largest monthly decline in the history of this index, the Central Bank said on Friday.

And nationwide, retail sales continued to plummet (-16.4%).

On the same day, the US Department of Commerce announced a series of measures to curb the ability of the Chinese group Huawei to develop semiconductors abroad using American technology.

Chinese authorities reiterated on Sunday that they will take “necessary measures” to defend the telecommunications giant and other Chinese companies.

Since gold is considered a safe haven, it tends to appreciate in times of political or economic uncertainty.

In the past two months, the precious metal has also benefited from the ultra-accommodative measures of the main central banks, the latter having injected unprecedented amounts of liquidity into the economy.

In this regard, the rise in gold was “predictable,” said Joshua Mahony, analyst for IG.

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