The price of gold started recovering from the drop experienced last week that led it to test the support set at $ 1,700. A week after protests began in the United States over the murder of George Floyd, the price of gold exceeded $ 1,740.
Currently, the US’s cities are undergoing days of extreme agitation: protests, looting, beatings, repression, arrests, and murders. On May 25, Minneapolis officer Derek Chauvin killed the 46-year-old African American, George Floyd, by suffocation. After this incident, thousands of people have gathered in the streets of large American cities demanding the end of abuse of power and racial discrimination. These demonstrations resulted in violence by both the police and protesters.
President Trump’s response has not calmed the demonstrators down. By May 29, the executive issued an ultimatum to Minneapolis protesters, suggesting that the military could use armed force to stem the unrest. When the looting begins, the shooting begins, he threatened on Twitter.
Impacts on the Gold
This panorama has aggravated the climate of economic uncertainty already quite deep in the North American country. If quarantines slowed down the economic recovery before, now it has become even more difficult. The protests also increase the possibility of a new wave of coronavirus infections in the country that has already killed more than 107 000 people.
In response to political instability, Gold prices increased. James Hatzigiannis, head of a market strategy at Ploutus Capital, has pointed out that the situation of protests and the trade war with China can have both positive and negative effects on the price of gold.
Edward Moya, a market analyst at Oanda, thinks that trade friction between the world’s two largest economies could start to take its toll on the recovery in global trade and should give gold more support.