FILE PHOTO: Gold bullion is displayed at Hatton Garden Metals precious metal dealers in London, Britain July 21, 2015.
(Photo: REUTERS/Neil Hall/File Photo)

Gold futures made a strong move upwards and broke the $1,500/ounce barrier on robust demand as global stocks plummet courtesy of the United States and China's escalating trade conflict.

Market observers have projected that prices already at 6-year peaks will hit the $1,600/ounce in the next two-quarters safe-haven assets become more appealing.

The gloomy global economic forecast, sparked by the two superpowers' conflict, are jacking up prices of the yellow metal.

Gold has climbed as much as 2.7%/ounce on the Comex to its highest since six years ago. The advance pushes this year's rally to 20%, with increases supported by inflows into exchange-traded funds (ETF) and purchases from major banks. China increased its gold reserves for an 8th consecutive month in July.

According to Goldman Sachs analysts, if growth concerns continue, possibly as a repercussion of a trade war spillover, prices of the precious metal could fetch even higher, triggered by a bigger ETF allocation from portfolio managers who still keep under-owning gold. Gold ETFs, the analysts noted, have recently created "a strong pace nearly as solid as in 2016".

Gold has been among the biggest beneficiaries of the discord in world markets as US President Donald Trump and Chinese leader Xi Jinping exchanged barbs over trade. In the past days, Washington threatened to slap new taxes for Chinese products, the yuan was deliberately allowed to devalue, and Trump called China "a currency manipulator."

The economic sparring between US and China has doubled the odds of further easing from the US central bank, and consistent growth worries have prompted market analysts to estimate prices to hit the $1,600/ounce threshold in the next 6 months.

ETF Bullion Holdings was up to its highest level since 2013 as fears of a global financial meltdown looms that saw over $700 billion cut from the market value of US equities on Monday.

The age-old mantra for owning gold as a way to safeguard one's assets became more apparent after the Bloomberg-Barclays Global Negative Yielding Debt Index settled at a record $15 trillion at the start of the week.

Wayne Gordon, UBS Group AG executive director for foreign exchange, pointed out that "gold is serving its traditional role as a safe-haven asset." Based on the financial group's risk case scenario outlook, prices could hit as high as $1,600, if Trump and Xi continue to fight.