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Gold Prices Edge Up Amidst Weakening Asian Shares

Gold prices inched up on Tuesday morning

Investing.com - Gold prices inched up on Tuesday morning in Asia as Asian stock markets fell amidst escalating geopolitical tensions over the killing of journalist Jamal Khashoggi and concerns over Italy’s budget.

Gold Futures for December delivery rose 0.16% to $1,226.7 per troy ounce by 11:15PM ET (03:15 GMT) on the COMEX metals division of the New York Mercantile Exchange.

Gold prices were impacted by drops in Asian equity markets. Major equity boards were in the red. China’s Shanghai Composite fell 1.57% and the Shenzhen Component dropped 1.89%. Hong Kong’s Hang Seng Index slipped 2.18%. Japan’s Nikkei 225 lost 2.39% and South Korea’s KOSPI also tumbled 2.37%. Amidst the uncertainties in the equity markets, the precious yellow metal is seen as a safe haven, so its demand is likely to grow.

Investors remained concerned about geopolitical tension, particularly in regard to the fallout from the killing of Khashoggi at a Saudi Arabian consulate in Turkey.

Turkish President Tayyip Erdogan is expected to reveal the “naked truth” on Tuesday about the death of Khashoggi, who was found missing after entering the Saudi consulate on Oct. 2 to obtain a marriage document.

Erdogan said in a speech in Istanbul on Sunday, “We are looking for justice here and this will be revealed in all its naked truth, not through some ordinary steps but in all its naked truth.”

The country’s media leaked an audio file last week, suggesting that the Washington Post columnist was tortured and dismembered inside the consulate.

U.S. President Donald Trump told USA Today on Monday that the murder of Khashoggi was “a plot gone awry” and implied he was considering measures to halt arms sales to the kingdom. On the same day, Treasury Secretary Steven Mnuchin met Saudi Arabia’s Crown Prince Mohammed bin Salman.

Saudi Arabia has been under international pressure over its role in Khashoggi’s murder. The kingdom said Salman was not aware of the killing, which it described as a “rogue operation.” Germany, France and the U.K. released a joint statement urging Saudi Arabia to back its explanation with facts.

Separately, Italy’s government refused to revise its plan for a jump in public spending and said that breaking the EU’s fiscal rules would not threaten the currency union’s stability, according to the Financial Times.

The European Commission issued a letter last Friday, saying that Italy’s member state’s budget breaks EU’s rules, and the spending was excessive. The EU is expected to ask Italy to revise its budget on Tuesday.

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