Afshin Sazegar | Gold price is recovering


Afshin Sazegar | Gold price is recovering

Afshin Sazegar | The price of gold recovered in Asia after US President Donald Trump signed laws supporting the pro-democracy movement in Hong Kong on Wednesday evening (local time). This increases the risk aversion on the international financial markets.


On Wednesday night, Trump signed the Hong Kong Human Rights and Democracy Act, which requires the State Department to confirm once a year that Hong Kong is sufficiently autonomous to maintain its special US trade status. The US president also signed another bill banning the sale of ammunition such as tear gas and rubber bullets to the Hong Kong police.


Beijing immediately threatened the "blatant interference in internal affairs" with countermeasures.


In a statement hours after the signing, Beijing said to the US that they should not underestimate China's capabilities and strategies to protect its sovereignty, security, growth, and rights.


Recent developments are likely to complicate trade negotiations, marketers believe.


"I think it could easily get a lot worse," said Kay Van-Petersen, a global macro strategist at Saxo Capital Markets in Singapore, Reuters reports. "Based on what happens in the next 24-48 hours, we could see a greater chance of a downward move."


US President Donald Trump said earlier this week that they are in the final stages of a trade deal. At the same time, the Chinese Ministry of Commerce announced that Vice Premier Liu He had two telephone conversations with US sales representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin.


The acceptance of an invitation to trade talks in Beijing is still pending. China actually wanted to speak to the US personally before Thanksgiving.


Shares in Asia were lower on Thursday. The US futures also fell. The gold price, however, benefited from the higher risk aversion.


US gold futures rose 0.2% to $ 1,462.95 at 1:45 AM ET (05:45 GMT).


Afshin Sazegar


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