Equity 1 Group
Pushing back the frontiers of economic ignorance and restoring sound financial foundations, one family at a time.

Tension Between US, China Breathes New Life Into Gold Market

NewsmaxFinance  |

An Indian saleswoman arranges gold bars

Geopolitical tensions are back on the radar, helping spur haven demand for gold.

The Pentagon demanded that China immediately return a U.S. Navy underwater drone captured in the South China Sea, sparking new friction in a region where China has sought increasing control. The S&P 500 Index of equities slipped.

Gold futures for February delivery gained as much as 1.2 percent to $1,143.20 an ounce, before settling at $1,137.40 at 1:41 p.m. on the Comex in New York. Prices still posted a sixth straight weekly loss, falling 2.1 percent, in the worst streak in more than a year.

“Traders are always mindful of geopolitical events,” Bob Haberkorn, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “Geopolitical risks are bringing life back into gold.”

Federal Reserve Bank of Richmond President Jeffrey Lacker said policy makers may need more than three interest rate increases in 2017, hurting demand for non-interest bearing assets like gold. Prices slumped 2.9 percent on Thursday, a day after the Fed raised borrowing costs for the first time this year, and new projections showed officials expect three quarter-point rate increases next year.

“The story will continue to always revert back to the Fed,” Haberkorn said.




No Responses to “Tension Between US, China Breathes New Life Into Gold Market”

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: