Investing.com – Gold prices rose sharply on Wednesday supported by a slump in the dollar while growing fears of a US-China trade war fuelled a modest uptick in safe-haven demand.
for February delivery on the Comex division of the New York Mercantile Exchange rose by $22.40, or 1.68%, to $1,359.10 a troy ounce.
The dollar came under heavy selling pressure falling nearly 1%, boosting demand for the gold, after Treasury Secretary Steven Mnuchin signalled his endorsement of a low dollar.
“Obviously a weaker dollar is good for us as it relates to trade and opportunities,” Mnuchin told reporters in Davos, according to Bloomberg.
Dollar-denominated assets such as gold are sensitive to moves in the dollar – a decline in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand.
Meanwhile, renewed geopolitical uncertainty triggered modest safe-haven demand, which further supported upside momentum in the yellow metal.
Commerce Secretary Wilbur Ross claimed that China’s tech ambitions under its 2025 were a “direct threat” that is being implement “by disrespect for intellectual property rights” among other “very bad things.”
Ross’s comments come amid growing investor expectations that President Trump will impose a bevy of steeper tariffs on steel, aluminium and intellectual property.
In other precious metal trade, rose 3.83% to $17.56a troy ounce, while rose 1.42% to $1,022.
rose 3.76. to $3.23, while rose 2.79% to $3.54.
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Source: Investing.com
