Gold hits record high on haven demand as markets rally sputters

HONG KONG -- Gold hit a record high Monday as investors rushed into the safe-haven on concerns about China-US tensions, a spike in virus infections around the world and a lack of progress on a new stimulus bill in Washington.

After months of healthy rallies across equity markets -- fuelled by trillions of dollars in government and central bank support -- traders are beginning to step back as they weigh the long-term economic impact of the coronavirus.

With vast monetary easing measures put in place by the Federal Reserve pushing the dollar lower against most other currencies, gold is flying, hitting an all-time high of $1,944.71, well above its previous record of $1,921.18 seen in 2011. It later pulled back slightly.

Eyes are on the Fed's next policy meeting this week, with some predicting further measures to boost the economy -- possibly negative interest rates -- that could put more pressure on the dollar and send bullion above $2,000.

There are also concerns that a worse-than-forecast reading on second-quarter US gross domestic product could spark another dollar sell-off.

While the weak dollar has been a key catalyst for the metal's advance, gold has also been boosted by its attractiveness as a haven in times of turmoil with China-US relations souring by the day.

"Strong gains are inevitable as we enter a period much like the post-global financial crisis environment, where gold prices soared to record levels as a result of copious amounts of Fed money being pumped into the financial system," said Gavin Wendt, senior resource analyst at MineLife.

The greenback was down against most other currencies, with the euro at its highest since September 2018, while higher-yielding units such as the South Korean won and Indonesian rupiah were also up.

US stimulus struggle

Stock markets were mixed as investors fret over the impact of the virus on the economy.

Hong Kong, Tokyo, Singapore, Mumbai and Wellington were all in the red, while Shanghai, Sydney, Seoul and Jakarta were higher.

The tech-rich Taipei market ended at a record high thanks to a 10 percent surge in heavyweight Taiwan Semiconductor Manufactuirng Company, which has been riding a rally in the sector thanks to people working from home during the virus.

London, Paris opened with losses, but Frankfurt was up.

Investors are growing concerned about slow progress on a new US stimulus programme, with Republicans still to present proposals worth around $1 trillion, which is less than a third of the plan set out by Democrats.

There are concerns an agreement could take some time, hitting millions of Americans whose much-needed extra unemployment benefits are about to come to an end.

Meanwhile, Hong Kong's stock market launched a new index Monday tracking China's tech giants. The Hang Seng Tech Index tracks the top 30 tech firms listed in the city, including Alibaba, JD.com, Tencent, Xiaomi and Meituan Dianping.

Hong Kong has become an increasingly attractive place for Chinese tech companies to list, especially as they face greater scrutiny and restrictions in the United States.

Agence France-Presse

US eyes banning TikTok, other Chinese apps: Pompeo

WASHINGTON - Secretary of State Mike Pompeo has said the US is "looking at" banning Chinese social media apps, including TikTok, over allegations Beijing is using them to spy on users.

India has already barred the wildly popular TikTok app over national security and privacy concerns while other countries are reportedly mulling similar measures.

Asked on Monday by Fox News's Laura Ingraham if the US should consider blocking the apps -- "especially Tik Tok" -- the country's top diplomat said the Trump administration was "taking this very seriously; we are certainly looking at it."

Pompeo said the US had been working for a "long time" on the "problems" of Chinese technology in infrastructure and was "making real progress."

"With respect to Chinese apps on people's cell phones, I can assure you the United States will get this one right too," he said.

"I don't want to get out in front of the president, but it's something we are looking at."

Pompeo earlier lashed out at what he called China's "Orwellian" moves to censor activists, schools and libraries in Hong Kong under a sweeping new security law.

Authorities in the financial hub have ordered schools to remove books for review under the law, which has criminalized certain opinions such as calls for independence or more autonomy.

Libraries in Hong Kong said they were pulling titles written by a handful of pro-democracy activists.

"The Chinese Communist Party's destruction of free Hong Kong continues," Pompeo said in a sharply worded statement.

"With the ink barely dry on the repressive National Security Law, local authorities -- in an Orwellian move -- have now established a central government national security office, started removing books critical of the CCP from library shelves, banned political slogans, and are now requiring schools to enforce censorship," he said.

Pompeo condemned what he called the "latest assaults on the rights and freedoms of the people of Hong Kong."

"Until now, Hong Kong flourished because it allowed free thinking and free speech, under an independent rule of law. No more," he said.

Beijing has faced a groundswell of criticism from primarily Western nations over its decision to impose the security law, which outlaws acts of subversion, secession, terrorism and colluding with foreign forces.

US Vice President Mike Pence told CNBC last week that the law was a "betrayal" and "unacceptable to freedom-loving people around the world."

Last week the US Congress passed tough new sanctions targeting banks involved in violating Hong Kong's autonomy.

The act would punish banks -- including by blocking loans from US institutions -- if they conduct "significant transactions" with officials who violate the city's autonomy.

President Donald Trump must sign the legislation for it to take effect.

Agence France-Presse