Gold reaches highest level in six years

Signs of further escalation of the trade war between the United States and China and weak economic data from the United Kingdom weighed on global markets on Friday, capping a volatile week that has pushed gold up to its highest level in six years.

The prospect of snap elections in Italy brought down shares across Europe. London’s FTSE 100 index and the pound sank after Britain reported its economy shrank in the second quarter, the first contraction in seven years.

European shares fell on Friday, leading them to post a second straight week of losses, as worries about the stability of Italy’s government rattled investors and concerns about Sino-U.S. trade tensions lingered. Milan’s FTMIB index tumbled 1.6% with Italian banks hardest hit after the leader of the ruling League party, Matteo Salvini, pulled his support for the country’s governing coalition on Thursday.

The pan-European STOXX 600 index fell 0.2% after recording its best day in almost two months on Thursday, following upbeat trade data from China and a steadying of its currency.

Also weighing on risk appetite was a Bloomberg report, which said that Washington is delaying a decision about licenses for U.S. firms to restart trade with Huawei Technologies, making investors nervous about a rampup of bickering in the ongoing trade dispute.

Helping to limit losses on the benchmark was the healthcare sector, boosted by Novo Nordisk, which beat quarterly operating profit forecasts and raised its 2019 sales outlook.

Other safe havens also gained. Gold rose back above $1,500 on Friday, its highest in more than six years, en route to its best week since April 2016.

Expectations of production cuts by OPEC pushed Brent crude back above $58 per barrel and U.S. West Texas Intermediate (WTI) made it past $53. Worries about the global economy have pushed Brent down 6% for the week and WTI more than 5%.