Gold rallies into 5th day as US-China row enhances appeal
GOLD extended its rally into a fifth session on Thursday, hitting a nine-year high as escalating US-China tensions increased its safe-haven appeal. Spot gold was 0.6 per cent higher at US$1,882.17 per ounce by 0950 GMT, having hit its highest since September 2011 at US$1,888.26. US gold futures rose 0.9 per cent to US$1,881.50.
"Gold as store of value has significantly enhanced so it wouldn't be a surprise if it rises to US$1,900," Bank of China International analyst Xiao Fu said.
Geopolitical risk premium, worries of a further confrontation between Washington and Beijing and ample liquidity from widespread central bank stimulus are driving prices, she added. The US gave China until Friday to close its consulate in Houston following accusations of spying.
Supporting bullion further, the dollar index touched a more than four-month low.
Expectations of another round of US stimulus measures also helped gold since it is considered a hedge against inflation and currency debasement. Indicative of investor sentiment, holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.4 per cent to 1,225.01 tonnes on Wednesday, its highest since March 2013. REUTERS
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