Gold Prices Hit Record High Amid US-China Trade Tensions

Gold prices have skyrocketed to a new all-time high, continuing their upward trend from the previous session. The surge comes as ongoing trade tensions between the United States and China push investors toward safe-haven assets.

Ad

On Wednesday, gold surpassed $2,854 per ounce, marking its highest level ever. This spike followed former U.S. President Donald Trump's decision to impose a 10% tariff on Chinese imports, prompting a cautious yet strategic response from Beijing.

Although China’s reaction was milder than in past trade disputes, uncertainty remains about the long-term economic impact on the world's two biggest economies. Investors are keeping a close eye on how these tariffs might influence U.S. monetary policy, especially concerning inflation.

Advertisement

Adding to the instability, Trump proposed that the U.S. take control of Gaza and lead its reconstruction efforts during a press conference with Israeli Prime Minister Benjamin Netanyahu. This unexpected geopolitical move further heightened market anxiety, making gold an even more attractive investment. However, its long-term appeal could be dampened if interest rates stay high.

The U.S. dollar weakened after a jobs report signaled a gradual slowdown in the labor market. A weaker dollar generally makes gold more affordable for international buyers. “Right now, investors are looking for a safe place to park their money,” said Charu Chanana, a strategist at Saxo Capital Markets Pte. “With no positive signs in U.S.-China talks and growing geopolitical tensions, gold is likely to remain in high demand regardless of currency movements.”

By late morning in Singapore, spot gold had climbed 0.4% to $2,853.84 per ounce. Meanwhile, the Bloomberg Dollar Spot Index fell 0.1%, extending its 0.7% drop from the previous day. Other precious metals had mixed results, with silver and palladium dipping slightly while platinum inched up.

Even before the tariffs took effect, the trade war had already shaken up the precious metals market. In recent weeks, U.S. gold and silver prices surged beyond international benchmarks, prompting traders and dealers to rush large shipments into the country. The heightened demand also led to a spike in lease rates for gold and silver, as investors scrambled to take advantage of short-term lending opportunities in London’s bullion vaults.

Also Read: Gold Prices Remain Robust Above $2,500 as Investors Await Powell’s Jackson Hole Speech