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Gold prices surged in Asian trading on Wednesday, regaining ground above the $3,000 mark as investors flocked to safe-haven assets after U.S. President Donald Trump’s sweeping tariffs on China took effect. A weakening U.S. dollar further boosted demand for the yellow metal.
As of 02:35 ET (06:35 GMT):
- Spot Gold was up 1.6% at $3,031.02 per ounce.
- Gold Futures (June expiry) jumped 1.9% to $3,046.61 per ounce.
Gold had earlier this week fallen below $3,000 to its lowest level since March 13, as traders liquidated positions to cover losses in other risk assets. The current rebound comes after bullion had briefly hit an all-time high on April 3, when Trump initially announced the new round of tariffs.
Safe-Haven Appeal Reignites After 104% Tariffs on China
The renewed demand for gold was driven by a sharp risk-off mood following the official rollout of U.S. tariffs. The most significant action was a 104% cumulative tariff on Chinese imports, which combines earlier levies with a new 50% hike unveiled on Tuesday.
In addition to China, new tariffs include:
- 20% on the European Union
- 24% on Japan
- 46% on Vietnam
- 25% on South Korea
- 32% on Taiwan
The escalation raised fears of prolonged global trade disruptions and recessionary risks, pushing investors into traditional safe-haven assets like gold.
China’s Ministry of Commerce responded by pledging to “fight to the end,” fueling concerns over further retaliatory measures and broader market instability.
Weaker Dollar Adds to Gold’s Upside
The U.S. Dollar Index fell 0.7%, hitting a six-month low, making gold more attractive to international buyers. The decline in the greenback came as traders digested the economic risks posed by the trade war and increasingly priced in potential rate cuts by the Federal Reserve.
Markets are now watching closely for any signs from the Fed regarding its policy outlook, especially if inflation softens and growth slows further.
Other Precious Metals Also Rise
Gold’s rally lifted the broader precious metals complex:
- Silver Futures rose 1.8% to $30.210 per ounce.
- Platinum Futures gained 0.5% to $916.65 per ounce.
Copper Slides as Trade War Clouds Demand Outlook
In contrast, copper prices declined on Tuesday, pressured by demand concerns amid Trump’s tariffs.
As the world’s largest consumer of copper, any economic slowdown in China poses a major threat to global copper demand. Investors are growing wary of prolonged trade tensions dragging down industrial activity.
- LME Copper Futures fell 0.6% to $8,595.0 per ton.
- Copper Futures (May delivery) edged 0.6% higher to $4.1512 per pound.
Outlook
With tariffs now fully in effect and no signs of de-escalation from either the U.S. or China, gold may continue to see strong support as investors seek protection from volatility and economic uncertainty. However, much will depend on upcoming responses from Beijing, the Federal Reserve, and broader macroeconomic indicators in the coming weeks.
