Japan's Gold Price Hits Record High Amid COVID-19 and US-China Tensions

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Amid expectations of a global economic recession due to the novel coronavirus infection (COVID-19), a preference for gold as a safe-haven asset has emerged, leading to gold futures prices in Japan surpassing 6,000 yen per gram (approximately 69,000 won) for the first time ever on the 18th, according to NHK and other broadcasts.

According to reports, the price of gold for delivery in April next year at the Tokyo Commodity Exchange exceeded 6,000 yen per gram. This is the first time since trading began in 1982 that gold futures prices have surpassed 6,000 yen.

NHK explained, "Gold, as a safe-haven asset in financial markets, tends to sell better when concerns about the global economy intensify," adding that although there are movements to resume economic activities in some quarters, investors are worried about an economic recession due to a second wave of COVID-19, which has caused this situation.

Recent conflicts between the United States and China have also heightened market anxiety, driving up demand for gold purchases. On the 15th (local time), the U.S. Department of Commerce announced new regulations requiring overseas semiconductor companies using U.S. technology and software to obtain separate approval before supplying products to Chinese telecommunications equipment firms (Huawei).