Always a sign of trouble, gold continued its red hot streak on Monday, the safe haven commodity looking mighty attractive after another troubling weekend of covid-19 and US-China headlines.
Though it has been on the up and up all year – save a sharp downturn in the first couple of weeks of March – gold has really accelerated in the last week. From Monday to Monday is has surged 6.5%, with a 1.7% increase this morning lifting it above $1930 per ounce for the first time in history.
Interestingly despite the precious metal’s major gains, the European indices weren’t too panicked post-open. The FTSE fell half a percent, ducking back under 6100, with the CAC down 0.4%, and the DAX unchanged at 12850.
The main issue was the situation between the US and China, with Beijing swift in taking back the premises of the American consulate in Chengdu, only a day or do after announcing its closure. This, of course, follows Washington shuttering the Chinese consulate in Houston. Technically, the superpowers are all-square in this specific tete-a-tete – but investors are worried about what comes next.
And this is not to forget the small matter of covid-19 – you may have heard of it – with China posting its highest daily increase in new cases since April. This comes on top of fresh hotspots in Australia, Vietnam and Hong Kong.
There was also the shock re-imposition of quarantine measures on travellers returning to the UK from Spain, a move that has dealt a serious blow to the hopes of a half-normal summer holiday season. Just ask TUI, easyJet and British Airways-owner IAG – they fell 14%, 13% and 10% respectively in the aftermath of the weekend’s announcement, with the UK government warning more countries could be put on the quarantine list.
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