After U.S. President Donald Trump increased tariffs on China, the world’s largest buyer of metals, even though he had decided to temporarily reduce high taxes on several other nations, gold prices surged on Thursday as investors sought refuge in the safe-haven asset.
At $3,089.17 an ounce, spot gold was up 0.2% as of 0022 GMT. The price of bullion peaked on April 3 at $3,167.57. At $3,104.90, U.S. gold futures GOLD increased 0.8%.
Trump made the startling decision to temporarily reduce the high tariffs he had just placed on dozens of nations while increasing pressure on China on Wednesday.
With his announcement that he would increase the tax on Chinese goods from 104% to 125%, Trump escalated a high-stakes conflict between the world’s two biggest economies. For the last week, the two nations have exchanged tariff rises on many occasions.
A low-interest rate environment is frequently favourable for gold, which is historically viewed as a hedge against political and economic instability.
Minutes of the Federal Reserve’s most recent meeting show that last month, officials were almost united in warning that the U.S. economy faced dangers of weaker growth and rising inflation, with some pointing out that “difficult tradeoffs” may be coming.
For vital information on the Fed’s rate trajectory, traders anticipate the Producer Price Index data on Friday and the U.S. Consumer Price Index data later in the day.
Palladium XPDUSD1! declined 1% to $922.50, platinum PL1! dropped 0.4% to $933.20, while silver XAGUSD1! saw a 0.5% decline to $30.89 an ounce.
