Gold sets new record

news-single-imgcaption" style="width:240px">The precious metal benefited from the ultra-accommodative measures of the main central banks, the latter having injected unprecedented sums of liquidity into the economy. (Keystone)

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Gold reached a level seen on Monday since October 2012, boosted by investor caution regarding the economic recovery and against a backdrop 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 the disastrous US economic figures on Friday, 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. “

American industrial production fell 11.2% in April, the largest monthly decline in the history of this index, the Central Bank said on Friday. And across the country, retail sales continued to plummet (-16.4%).

The same day, the United States 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 would take “necessary steps” 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. (Awp)

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