Gold rises to eight-month high as Huawei tensions weigh on dollar
Gold prices reached their highest point in over eight months today after the dollar fell on worries over US-China relations.
The metal rose to $1,309 per ounce in the early afternoon, a 0.69 per cent rise.
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The boost to speculators came after the US charged Chinese telecoms giant Huawei with fraud, claiming it had stolen technology from T-Mobile and busted Iran sanctions.
The dollar reached its lowest point in two weeks against a basket of other world currencies as investors feared progress in relations between the countries would be lost.
“There’s plenty of reason to still look at gold as a means to have some protection” against other market forces, said Saxo Bank analyst Ole Hansen.
“The momentum in gold has been established now. We just need to work out how strongly the momentum has been backed by speculative interest.”
But the recent rise is not enough to make up 12-month losses, with gold still down 2.98 per cent from January 2018.
In August the metal fell to a one and a half year low at $1,177 amid a global stock sell-off.
“From a technical point of view, its price is now entering in a ‘new area’, with the return in the $1,300-1,350 range, which was the lateral range where we have seen gold moving in the first semester of 2018,” said ActivTrades analyst Carlo Alberto De Casa.
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Analysts polled by Reuters expect prices will level out at current rates this year, as gold will average around $1,305 per ounce, and $1,350 in 2020.
The price would mean a rise of around three per cent from last year’s average.