Gold Climbs up Amid Tumultuous U.S.-China Relations

The Asian Markets saw the safe-haven asset, gold, climbing up thus extending its gains from Friday. This is recorded to be its highest point since October 2012.

With the relationship between U.S. and China in dire straits, alongside gloomy investment forecasts, investors turned to the yellow-metal. Peter Navarro, the White House trade advisor, aggravated an already desperate situation by suggesting that Beijing sent, “hundreds of thousands of Chinese on aircraft to Milan, New York and around the world” in a conscious effort to expedite the spread of the coronavirus after concealing information from the world for two months.

Gold Futures went up by 0.71% at $1768.85 by 12:13 AM ET (5:13 AM GMT). Stocks on the other hand, having an inverse relationship with the precious metal, climbed up on Monday as well.

U.S. President Donald Trump, after Navarro’s statement, said that he was “not thrilled” with the first leg of the U.S.-China trade deal that they had reached back in January. This was so even after Larry Kudlow, director to the National Economic Council, declared that the two countries were still engaged in talks for a sound deal.

The Trump administration went on to block chip supplies to Huawei Technologies, with investors bracing themselves for a potential retaliation from China.

In a “60 Minutes” interview, U.S. Federal Reserve Chair Jerome Powell had warned that the U.S. economy is susceptible to a shrink of 30% in the second quarter. And while the country could dodge a second Great Depression moving forward, full economic recovery would only be in the cards once a vaccine is declared potent against COVID-19.

The Fed is also amenable to the deployment of ammunition to help economic recovery, should it prove necessary, according to Powell.