By Barani Krishnan
Investing.com - Gold hit two-week lows below $1,700 per ounce on Wednesday before settling above that level as U.S.-Sino tensions escalated from remarks by Washington that the Hong Kong territory was no longer autonomous of China.
Gold buyers also took refuge in the safe haven after a Canadian court ruled that Chinese tech giant Huawei’s senior official Meng Wanzhou can be extradited to the United States after all to face charges of allegedly violating U.S. sanctions on Iran. Meng’s extradition could worsen already strained ties between Beijing and Washington.
“The new 'Cold War' between China and the US will also likely drive a lot of demand for gold as tensions will remain in place leading all the way up to the presidential election,” Ed Moya, analyst at New York’s OANDA said, referring to the November race where President Donald Trump will be seeking reelection.
U.S. gold futures for June settled up $5.10, or 0.3%, at $1,710.70 per ounce, after hitting a session bottom of $1,684.85 earlier.
Spot gold, which tracks real-time trades in bullion, was up $1.73, or 0.1%, at $1,713.28 by 2:47 PM ET (18:47 GMT).
It was the first time since May 13 that gold had fallen below the $1,700 perch as investors veered from safe-havens and into instruments such as stocks and oil amid optimism over U.S. economic reopenings from Covid-19 lockdowns.
Gold, however, returned above $1,700 after U.S. Secretary of State Mike Pompeo announced today that Washington no longer considered Hong Kong autonomous of China.