Gold Pares Gains After Brief Surge Above $4,000 as Trump Revives China Tariff Fears

Gold prices eased on Friday after briefly breaking above the $4,000-per-ounce mark for the second time this week, as renewed trade tensions between the United States and China triggered a wave of risk aversion. The rally was sparked by U.S. President Donald Trump’s warning that Washington could impose new tariffs on Chinese imports—a statement that sent investors rushing toward safe-haven assets.

Spot gold jumped to a session high of $4,022.52 before trimming gains to $3,989.49 per ounce, up 0.4% at the time of writing. The metal recorded a 2.7% weekly increase, marking its eighth consecutive weekly advance. U.S. gold futures for December delivery settled 0.7% higher at $4,000.40, cementing gold’s strong performance in recent weeks.

The sudden spike came after Trump said there was “no reason” to meet China’s President Xi Jinping in South Korea later this month, signaling a potential escalation in trade tensions. Markets interpreted his comments as a prelude to higher tariffs, raising fears of a renewed trade war. “Heating up the trade war again will tank the dollar and support safe-havens,” said an independent metals trader.

Following the remarks, the U.S. dollar index (DXY) fell 0.5%, making dollar-priced bullion more attractive to foreign investors. Gold’s momentum has also been supported by broader geopolitical and economic uncertainties, including political instability in France and the ongoing U.S. government shutdown, both of which have strengthened demand for safe assets.

Investors are now betting the Federal Reserve will cut interest rates twice—by 25 basis points each in October and December—to counter slowing growth. Lower borrowing costs tend to boost gold by reducing the opportunity cost of holding non-yielding assets.

Gold hit an all-time high of $4,059.05 per ounce earlier in the week, driven by strong central bank purchases, exchange-traded fund inflows, and continued economic anxieties. Analysts warn that the rapid rise could trigger short-term corrections, though most expect gold to trend higher over the coming years.

Silver followed a similar path, rising 2.1% to $50.13 per ounce after touching a record $51.22 on Thursday. The white metal has surged over 73% year-to-date, supported by strong industrial demand and supply constraints. Meanwhile, platinum logged a modest weekly loss, and palladium managed to edge higher.

For now, traders remain focused on Washington and Beijing. If Trump moves ahead with his tariff threat, analysts say gold could sustain levels well above $4,000, reinforcing its status as the ultimate hedge against policy shocks and economic turbulence.