Gold surges as tensions flare in the South China Sea
Gold spiked to session highs on Friday following word of renewed tension in the South China Sea after word China seized an American underwater drone off the coast of the Philippines on Thursday. The precious metal hit a session high above $1141 per ounce, up 1%, as word of the incident crossed the wires, but has since pulled back to $1137.
Gold has been under pressure as of late despite the election of Donald Trump, which analysts believed would be a positive for the shiny metal because of the presumption his protectionist trade policy and plans for massive infrastructure spending would bring back inflation to the United States. Selling since the July peak of $1375 has the metal approaching bear market territory, a drop of 20%, with much of that move coming after the election of Trump.
Heavy selling on Wednesday pushed gold down more than 2% as the Fed suggested it could hike rates three times in 2016, once more than its previous forecast.
