Gold prices touched a two-week low on Wednesday due to optimism over the reopening of many economies, yet, growing differences between China and the United States over the proposed Beijing-Hong Kong security law reduced losses.
The spot gold price fell 0.3% to $ 1705.94 an ounce, after hitting its lowest level since May 13 at $ 1703.40 earlier in the session, while the US gold futures fell 0.6% to $ 1,695.80.
On Tuesday, gold fell 1.3% to $ 1707.10, the lowest level in two weeks.
"What we saw in the previous 24 hours was to break a relatively meaningful support at around $ 1715," said Ilya Spivac, currency strategist at DailyFX.
"It seems that the positive story in the easing of restrictions will cause some kind of bounce in economic activity but, there is also a lot of negativity, tension between the US and China is a big risk," Spivac added.
US President Donald Trump said earlier yesterday that Washington was working on a strong response to China's planned national security law for Hong Kong, adding that it would be announced before the end of the week.
"The biggest danger is that people feel satisfied and forget that the long-term consequences of this closure will not go away any time soon and we will not have an ideal economy," Spivac pointed out.
Meantime, Asian stocks fell amid concerns over escalating tensions between China and the United States.
Gold & Trade War
Analysts said that despite the slump in bullion prices, the outlook is still positive for gold, which is seen as a safe haven asset during political and economic uncertainty.
The economic outlook for the developed world dwindled this year, as a sharp V-shaped recovery expected by fewer than a fifth of economists' poll by Reuters.
Under the US and Hong Kong Policy Act of 1992, the United States treats Hong Kong, a semi-independent part of China, differently from the mainland in trade, commerce and other areas.
Trade estimated at $ 38 billion between Hong Kong and the US could be disrupted, while nearly 300 U.S. companies have regional headquarters in the city.
Prices in Egypt
Gold prices recorded in Egypt a new decline of EGP 5, bringing the total to EGP 7 per gram, in light of the continued closure of gold stores until Saturday May 30.
18K recorded EGP 642.75
21K recorded EGP 750
24K recorded EGP 857.25
8g coin EGP 6000
31g ounce $ 1695.
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