* Gold sees safe haven demand push it to highest in one month as it breaches key $1,300/oz and £1,000/oz levels
* U.S. China trade wars escalates as China retaliates and imposes tariffs on $60 billion of U.S. goods
* Increased risk of war in Middle East after U.S. alleges Iran bombed Saudi oil vessels destined for the U.S.
Gold prices held steady near one-month highs today as an escalation in Sino-U.S. trade war saw increased risk aversion and sharp selling of stocks which sent investors into safe haven gold.
Increasing tensions in the Middle East are likely also leading to safe haven demand, particularly in the region. The U.S. appears to be inching towards war with Iran and unnamed US military officials have accused Iran of using explosives to blow holes in US-bound Saudi oil tankers in alleged sabotage attacks by Iran.
Asian shares extended losses today, following sharply lower U.S. stocks on Wall Street overnight after China announced retaliatory tariff-hike to counter Trump’s aggressive tariffs.
European shares have eked out small gains this morning despite the heightened trade, economic and geopolitical risks.
We believe that given the deteriorating trade, economic and geopolitical outlook, we may be in for a period of market volatility and risk aversion. Gold will again act as an excellent hedge for investors and is likely to eke out further gains in the coming months.