Gold futures edged higher Friday, a day after the front-month contract closed at an all-time high and the most active contract flirted with a record close as rising U.S.-China tensions and jitters about the economic outlook fueled haven-related demand for the precious metal.
China on Friday ordered the U.S. to close its consulate in the western city of Chengdu, the latest salvo in a dispute between Washington and Beijing. The U.S. earlier this week ordered China to close its Houston consulate, alleging Chinese agents had tried to steal data from facilities in Texas.
August gold GC00, +0.25% GCQ20, +0.25%, the most actively traded contract on Comex, was up $1.90, or 0.1%, at $1,891.90 an ounce. That would match the all-time closing high for a most active contract set in August 2011, according to Dow Jones Market Data. The all-time intraday high for a most actively traded contract stands at $1,923.70 an ounce from Sept. 6, 2011.
September silver SIU20, -0.64% fell 15.8 cents, or 0.7%, to $22.83 an ounce.
“The level of uncertainty (which we think is the biggest driver), low and negative real and nominal rates, politics and geopolitics, etc. have driven gold prices sharply higher, and pushed allocations among investors ever higher, putting total holdings at ever clearer record highs,” said Christopher Louney, analyst at RBC Capital Markets, in a note. “The recent move will continue to have legs under it as long as COVID-19 and the economic uncertainty it causes drags on, leaving holdings and interest sticky for the foreseeable future in our view.”
The front-month July gold contract GCN20, -0.27%, which trades on much lower volume, settled at $1,889.10 on Thursday, up $25, or 1.3%, for the session. That was a record for the front-month contracts, based on data going back to 1975. July gold was off $5.10, or 0.3%, at $1,884 an ounce.
For the week, August gold is on track for a 4.5% gain, while silver has surged more than 15%.