Gold prices rose on Friday, with investors averse to risk due to growing fears of the Chinese real estate giant’s “Evergrand” crisis, ignoring the dollar’s gains that usually pressure the precious metal.
And by 8:35 (GMT), gold increased in spot trading by $12.67, or 0.73 percent, to trade at $1,755.62 an ounce.
And US futures contracts rose by $5.85, or 0.33 percent, to $1,755.65 an ounce.
The rise in gold prices comes despite the dollar’s gains, which usually increase the cost of the precious metal to holders of other currencies.
And the dollar index contracts, which measure the performance of the US currency against a basket of six major competing currencies, increased 0.12 percent to 93,142 points.
Gold has benefited from being a safe haven, as investors are turning to value-preserving tools away from high-risk assets while awaiting clarification of the fate of the debt-laden Evergrande.
On Thursday, interest accrued on two issues on Evergrande, which it said it would meet, but none of the bondholders received their dues until Friday morning.
And “Evergrand” owes about 300 billion dollars, and it is feared that its crisis will spread to other markets, which heralds a series of collapses for major banks and companies around the world, similar to the mortgage crisis in the United States in 2008.
Gold has faced pressure in the past two days as a result of the dollar’s rise, after indications from the Federal Reserve (the US central bank) that it will start slowing its extensive program to buy bonds “soon”, followed by raising interest rates.
But the effects resulting from the US Central Bank’s hints on gold began to recede, with not giving it specific dates to start tightening its monetary policy.
To turn investors’ attention towards other factors, most notably the risks resulting from the “Evergrand” crisis.