Home Business Gold price rises to high level over investors growing need for safe haven

Gold price rises to high level over investors growing need for safe haven

by Business News Report

Gold hit an all-time high in the commodity market as demand for safe haven persisted due to economic concern in the U.S and uncertainty around trade war. On Friday, price of gold topped $3,000 per ounce for the first time ever. Tariff concerns that risk higher inflation and slower economic growth are spurring demand for safe-haven assets like gold. ING commodities strategist Ewa Manthey says in a Friday note. Yesterday, US President Donald Trump threatened to impose a 200% tariff on wine, champagne and other alcoholic beverages from France and elsewhere in the EU. This followed immediate retaliations from the EU and Canada after the White House implemented 25% tariffs on steel and aluminum imports earlier this week.
“We see uncertainty over trade and tariffs continuing to buoy gold prices – and if trade tensions intensify and we see more retaliatory measures, safe-haven demand for gold will continue”, says ING. Gold is one of the best-performing major commodities this year, up more than 14% year-to-date, according to ING.   It has hit a series of consecutive record highs along the way, driven by trade frictions, central bank buying, and inflows into Exchange Traded Fund (ETF) holdings. Total known gold exchange-trade fund holdings have grown by around 3.5moz so far this year to almost 86.4moz.  Central banks bought 1,045 tonnes last year, accounting for about a fifth of overall demand (according to the World Gold Council) and more purchases are likely to continue this year. “If we see more additions, this will give bullion prices a further tailwind. We believe more gains for gold are in sight”, ING.

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