Gold yesterday settled up by 0.66% at 51035 amid an escalation in the U.S.-China spat added further safe-haven fuel to a rally to a peak driven by fears over the economic hit from the coronavirus pandemic.
Gold prices rallied underpinned by low interest rates and stimulus from central banks to revive their economies, which benefits bullion since it’s a perceived hedge against inflation and currency debasement.
In the latest flare-up, China ordered the United States to shut its Chengdu consulate in retaliation for the closure of its consulate in Texas, dampening risk assets.
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Physical gold rates flipped to a discount in India as local prices surged while China’s discounts slipped further on weak retail demand, with silver emerging as a preferred asset in most Asian hubs.
In India, dealers offered discounts of up to $6 an ounce over official domestic prices in thin trade, versus last week’s $2 premium. Dealers in Hong Kong charged anywhere between $0.5 per ounce discount to a $1.5 premium, while premiums in Singapore widened to $0.8-$1.50 an ounce from $1.50 last week.
In Japan, premiums of $0.25-$0.50 per ounce was charged. Meanwhile, the Bangladesh Jewellers Association raised local rates to a record high, citing the rally in international markets.
