Riots in major U.S. cities were sparked by the death of George Floyd while he was in police custody in Minneapolis, Minnesota. The violent protests rattled investors already affected by the growing tensions between the U.S. and China.
The yellow metal was further supported by a weaker U.S. dollar. The dollar index has fallen by 0.4% against a basket of rival currencies in early trading on Monday.
Spot gold is trading at $1, 739.54 as of 0806 GMT.
Protests over the death of Floyd has spread in major cities and become more violent. A video of his death showed a white Minneapolis police officer kneeling on his neck for almost nine minutes. There were looting in upscale stores in Third Street Promenade in Santa Monica, California. Protesters set fires near the White House in Washington D.C. Protesters threw bottles and lit a cruise on fire. Demonstrators march through downtown Miami chanting “no justice, no peace.”
Around 350 people and 30 police officers were injured during clashes in New York City. Protests have also flared in Dallas, Cleveland, Salt Lake City, Seattle and Chicago and have spread outside the U.S. including the UK, Germany, New Zealand, Australia and the Netherlands.
The U.S. government has deployed National Guard troops in Washington D.C. and 15 states. The administration called the protesters “thugs” and said they would designate antifascist group Antifa as a terrorist organization. Dozens of cities have imposed curfews, the most since the assassination of Martin Luther King Jr.
Meanwhile, the Hong Kong government and China’s state media reacted to U.S. President Donald Trump’s pledge to revoke the city’s preferential treatment as a separate customs and travel territory and impose sanctions on certain Chinese officials responsible for the new national security laws in Hong Kong. They said the sanctions will not scare Hong Kong nor bring China down and will hurt the U.S. more than China.
In a related development, the U.S. Commodity Futures Trading Commission reported that market speculators reduced their bullish stance in COMEX gold in the week which ended on May 26. Also, the holdings of the largest gold-backed exchange-traded fund in the world SPDR Gold Trust increased by 0.3% to 1,123.15 tons. This reflects market sentiments and is the highest level in seven years.