Gold took a big stride toward $1,600 an ounce as the U.S.-China trade war worsened, hurting the outlook for global growth and boosting demand for the traditional haven as risk assets suffered.
Bullion futures rallied as much as 1.8% to $1,565 an ounce on the Comex, the highest since 2013. Silver was also favored, with spot prices up as much as 1.9%. The advances in the week’s opening session followed gains on Friday.
Gold is showing its mettle once again as a store of value during times of crisis, surging more than 20% this year as Washington and Beijing have squared off. The two sides traded fresh blows on Friday, and at the weekend, President Donald Trump kept up his hard line. The fight is hurting economic growth, boosting the likelihood of additional U.S. rate cuts from the Federal Reserve.
As most raw materials fell, precious metals are “the standout sector, as gold prices rallied,” Australia & New Zealand Banking Group Ltd. said in note.
Fed policy makers have made the case how trade disputes are poisoning the global economy and making their job more difficult. On Monday, the U.S. 10-year cash yield sank to 1.4695%, the lowest level since August 2016.
With futures 1.1% higher at $1,555 at 8:58 a.m. in Singapore, miners’ shares surged. In Sydney, Newcrest Mining Ltd. rallied as much as 5.8%.
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