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Gold price under pressure amid trade and security threats

By Marianne Curphey
November 8, 2019, 2:10 PM GMT
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    Sensitivity to the Fed’s easing programme and US-China trade negotiations caused the asset to slip further in morning trade

    The price of gold has come under further pressure as investors weigh up the chances of US-China negotiations over trade tariffs being resolved soon. It fell to $1,458 (£1138, €1321) in morning trade, a decrease of just over 0.7 per cent.

    This year the price of gold has been rising along with other risk-off assets such as US Treasuries and utility stocks, as investors sought safer havens.

    In recent weeks, however, it has come under negative pressure following the easing of the Federal Reserve’s stance on US base rates and hints that the US -China trade deal may be resolved.

    Gold has a tendency to be volatile, due to its sensitivity to political and economic news. With the suggestion that both the Federal Reserve and the ECB are taking a more dovish tone to ease the slowing of growth, with the Fed in particular worried about US growth going forward, gold is losing some of its appeal among investors.

    Meanwhile gold mining firms are still vulnerable to attacks, with physical assets and personnel being targeted. A recent attack on a convoy carrying hundreds of local employees and contractors from a mine owned by Canada’s Semafo has exposed how vulnerable firms still are. At least 37 civilians died, with another 60 injured and dozens more feared missing.

    Further reading: Gold dips below $1,500

    Further reading: Gold investor sentiment rises for fourth consecutive month

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