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Gold prices surged to a record high in Asian trading on Wednesday, powered by strong safe haven demand amid deepening U.S.-China trade tensions and mounting uncertainty over the global tech sector, after Nvidia issued a significant impairment warning tied to U.S. chip export restrictions.
- Spot gold jumped 1.7% to $3,317.92/oz
- Gold futures (June delivery) hit $3,299.52/oz, also a new peak
U.S. Trade Turmoil Keeps Gold in Demand
Investors flocked to gold as the Trump administration’s trade policy shifts continued to roil markets:
- Trump reaffirmed a 145% tariff on Chinese goods, prompting a 125% retaliation from Beijing
- While electronics were temporarily exempted, the White House is considering new tariffs on pharmaceuticals and semiconductors
- A 90-day exemption from some reciprocal tariffs provided short-term relief, but long-term uncertainty prevails
The U.S. dollar weakened amid these developments, as traders also dumped Treasuries, adding further support to gold’s bullish trajectory.
Nvidia $5.5 Billion Warning Shakes Confidence
Nvidia (NASDAQ:NVDA) warned on Tuesday that it expects a $5.5 billion impairment in its Q1 earnings due to expanded U.S. chip export restrictions to China.
- The move could block Nvidia and other U.S. chipmakers from selling into one of their largest markets
- The announcement triggered a tech sell-off in both U.S. and Asian markets, amplifying risk-off sentiment
The restrictions could also curb Chinese progress in AI, prompting fears of further retaliatory action from Beijing and heightening strategic tech-sector tensions between the world’s two largest economies.
Other Precious Metals Mixed
- Silver futures rose 0.5% to $32.455/oz, supported by investor inflows into precious metals broadly
- Platinum futures edged 0.1% lower to $968.95/oz, underperforming as industrial demand concerns linger
Copper Falls Despite Strong China Q1 GDP
Industrial metal prices slipped, even as China reported better-than-expected Q1 GDP growth of 5.4%, surpassing the forecasted 5.2%.
- London copper futures fell 0.6% to $9,108.85/ton
- U.S. copper futures dropped 0.5% to $4.5920/pound
Despite the strong headline figure, traders remain skeptical, as the data predates the most recent wave of tariffs, and weaker performance is expected in Q2 and beyond.
Outlook: Gold Rally May Continue if Tensions Persist
With geopolitical, tech, and economic uncertainties all converging, gold appears poised to remain elevated, especially as:
- Rate cuts loom in both Europe and the U.K.
- The Fed faces pressure to act if trade tensions escalate further
- The dollar continues to lose appeal as a haven compared to gold
Unless a clear de-escalation in U.S.-China trade tensions or a rebound in risk appetite emerges, gold could test new highs above $3,300/oz, while industrial metals and equities may continue to face headwinds.
