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Gold Prices Rebound Amid Safe-Haven Demand as Stock Markets Fall

© Reuters. – Gold prices drew some safe-haven demand and rebounded on Thursday in Asia as global stock markets fell.

Gold futures for December delivery, traded on the Comex division of the New York Mercantile Exchange gained 0.2% to $1,530.95.

An inverted yield curve was cited as driving investors away from risk assets and into the safe-haven metal.

Global markets fell after the yield on the 30-year U.S. bond hit an all-time low, while the yields on the German 10-year bund and the French 10-year OAT marked fresh record lows in negative territory.

“The last three times (the yield curve inverted), U.S. recessions soon followed,” global markets analyst Jesse Cohen noted.

Lower yields are beneficial to gold as they reduce the opportunity cost of holding the non-yielding precious metal.

Meanwhile, political unrest in Hong Kong also contributed to the gains in gold. Following months of protests against a proposed extradition bill, several Chinese firms are now reconsidering raising funds in Hong Kong, according to Bloomberg. One company scrapped plans for a $500 million IPO in Hong Kong, while at least two other companies are considering the same move, the article reported citing two senior bankers on the deals.

U.S. President Donald Trump suggested in a tweet overnight that he wants to have a “personal meeting” with his Chinese counterpart Xi Jinping over the ongoing Hong Kong crisis, and that a trade deal should come after China “work humanely with Hong Kong.”

In other news, Reuters reported citing industry sources that China has restricted import of gold since May by some 300-500 tonnes compared with last year. China imports about one-third of the world’s total supply, buying about 1,500 tonnes of metal last year, Reuters reported citing customs data.

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