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Gold surged to an all-time high in Asian trade on Wednesday, as escalating U.S.-China trade tensions and geopolitical concerns drove strong safe-haven demand for the yellow metal.
Spot gold rose 0.6% to a record $2,858.27 an ounce, while gold futures for April delivery climbed 0.4% to $2,885.39 an ounce.
Trade War Fears Fuel Flight to Safe-Haven Assets
The latest surge in bullion prices follows the U.S. imposing fresh 10% tariffs on Chinese imports, triggering an immediate retaliatory response from Beijing. China introduced counter-tariffs, imposed export controls, and took regulatory action against U.S. firms, including Google (NASDAQ:GOOGL).
U.S. President Donald Trump’s refusal to engage in trade talks with Chinese President Xi Jinping further dampened hopes of a near-term resolution, reinforcing investor concerns over prolonged global economic disruption.
Geopolitical Uncertainty Adds to Gold’s Momentum
In addition to trade risks, Trump’s comments on the U.S. taking control of the Gaza Strip and relocating Palestinians heightened geopolitical uncertainty, drawing sharp criticism from regional powers and further boosting safe-haven demand.
Dollar Weakness Provides Additional Support
The U.S. dollar weakened, erasing its gains for the week after Trump delayed trade tariffs on Mexico and Canada, providing additional tailwinds for gold prices. However, with China receiving no similar tariff relief, market sentiment remains cautious, reinforcing bullish momentum for gold.
Outlook and Risks
While ongoing trade and geopolitical tensions continue to support gold, analysts caution that prolonged tariffs may push U.S. inflation higher, keeping interest rates elevated—a scenario that could weigh on gold’s long-term appeal.
Other Precious and Industrial Metals
- Platinum futures edged lower to $1,011.30 an ounce.
- Silver futures declined 0.3% to $32.938 an ounce.
- Copper futures were flat, with LME benchmark copper at $9,193.50 per ton, while March contracts stood at $4.3675 per pound.
As investors brace for further trade policy shifts, gold remains a key barometer of risk sentiment, with traders watching closely for any developments in U.S.-China relations and broader economic policy shifts.
