On Tuesday, spot gold prices had spiked to a nearly four-week-high as an exacerbation in Sino-US tension over US House Speaker Pelosi’s visit into Taiwan had spurred up the bullion’s safe-haven appeal. Apart from that, risks of an imminent recession in the United States with many analysts claiming that the economy has already fallen in the press-stud of a ghastly contraction, also had heightened up appetite for spot gold.
Nonetheless, gold has witnessed a tumultuous July with US Fed appeared to be gambling on a rate-hike path in order to tune down a teetering inflation-surge, as the US Fed’s move to bet on an ultra-hawkish rate-hike cycle appeared to have failed to bear fruit but promoting dollarization, which in effect had been hammering US gold futures’ appeal down over recent past.
However, Tuesday’s commodity market had witnessed a upside momentum for spot gold, as geo-political risks are ratcheting up at a breakneck pace. Shortly after Pelosi’s arrival in Taiwan which China’s foreign ministry has condemned as an intentional breach of Chinese sovereignty, 21 Chinese SU-35 fighter jets have reportedly entered the airspace of Taiwan.
Gold gains as geo-political risks ramp up
On top of that, as questions were mounting on whether the US Fed’s July policy meet decision to solidify its stance on an aggressive rate-hike path could tame inflation with US inflation indicators nearing a worrisome double-digit figure and straining purchasing ability of common American nationals, traders seemed to have changed their net-long position on US Dollar, as spot gold’s stance as a safe-haven asset has stepped up dramatically over recent days.
Citing statistics, in the day’s late-afternoon US trading hour, spot gold was trading at $1,771.59 an ounce, while US gold futures’ prices closed 0.1 per cent higher to $1,789.70.