Gold prices were down slightly on Wednesday in Asia, losing gains made in a previous session. However, the safe haven asset’s losses remained limited as COVID-19 worries mounted on top of worsening U.S.-China relations.
Gold futures slipped by 0.11% to $1,811.35 per ounce at 11:44 PM ET (4:44 AM GMT), still keeping above the $1,800 mark.
With the number of COVID-19 cases around the world continues to rise, California Governor Gavin Newsom on Monday re-imposed social-distancing measures to be followed across the largest U.S. state.
In Asia, Tokyo raised the COVID-19 warning to its highest level on Wednesday, while Hong Kong implemented strict social-distancing measures, closing public areas and charging fines for those without face masks on public transport.
Demand for gold further strengthened amid souring U.S.-China relations after U.S. Secretary of State Mike Pompeo’s statement on Monday calling China’s claims in the South China Sea “illegal”. Later on, U.S. President Donald Trump on Tuesday would sign an executive order to end Hong Kong’s preferential trade status. The order will revoke all special privileges, special economic treatments, and ban the export of sensitive technology exports.
Trump also gave the signal to sanction Chinese entities that were involved in putting Hong Kong’s national security laws in place since July 1.