Gold was up on Monday morning in London’s trading session with global investors turning to the safe-haven asset after protesters flooded the streets in America over the death of George Floyd in police custody.
Spot gold gained 0.9% to $1,741.61 per ounce by 9 am Nigerian local time, while U.S. Gold futures gained 0.3% to trade at $1,757.50.
Consequently, global investors were astonished as protests surged in dozens of cities in the U.S. over the death of George Floyd.
Concerns were also strengthened over the impact to COVID-19 would have on the global economy as well as the possibility of another wave of infections.
“Concerns about the unrest in the United States at the moment appear to be weighing on market sentiment,” Michael McCarthy, chief strategist at CMC Markets reported to Reuters adding that growing tensions between the world’s largest economies further strengthened the base price for gold.
Why do Investors buy Gold? Global Investors most often buy the safe-haven asset in times of uncertainty and use it to hedge against cash (inflationary macros).
In addition, U.S. Federal Reserve Chair Jerome Powell further reduced investors’ risk appetites when he recently stated that the economic recovery from the impact of COVID-19 could pause if there is an increase in the number of American caseloads suffering from COVID-19.