Gold prices surged to a new record on Monday, driven by concerns over escalating US tariffs and a weakening US dollar, while stock markets showed mixed reactions.
The rise in gold comes as investor fears grow over former President Donald Trump’s aggressive tariff policies and tensions with the Federal Reserve. Despite several markets being closed for the Easter holiday, there were limited trading activities ahead of a week packed with key data releases, which could shed light on the impact of Trump’s trade war on the global economy, according to AFP reports.
Several countries have sought to negotiate with Washington in an effort to mitigate the effects of the US tariffs, with Japan being the most prominent among these economies. However, China issued a stern warning on Monday, advising governments not to strike agreements that undermine Beijing’s interests.
While most nations have been subjected to a blanket 10 percent tariff, China faces far steeper duties, with levies as high as 145 percent on many of its products. In response, China has imposed tariffs of 125 percent on US goods. A Chinese commerce ministry spokesperson emphasized that any attempts to prioritize short-term, selfish interests at the expense of others would ultimately fail and harm all parties involved. The statement warned that “appeasement will not bring peace, and compromise will not be respected.”
These remarks followed comments by Trump on Thursday, where he stated that the US was in negotiations with China regarding the tariffs, expressing confidence that a favorable deal would soon be reached. “We’re talking to China,” he said, adding, “I think we’re going to make a very good deal with China.”
Despite these assurances, global economic concerns have continued to fuel demand for safe-haven assets, with gold breaking its previous record to exceed $3,384. The precious metal’s rally was further supported by a weaker US dollar, which has been under pressure due to Trump’s ongoing standoff with Federal Reserve Chair Jerome Powell.
Last week, Trump criticized Powell for warning that the tariffs were likely to result in a temporary rise in inflation and for suggesting that interest rate cuts were unlikely. Trump, expressing dissatisfaction with Powell’s stance, even implied that he could remove the Fed chair if he chose to. “If I want him out, he’ll be out of there real fast, believe me,” Trump said.
In response, Powell maintained that he had no intention of stepping down early, emphasizing that the Federal Reserve’s independence in making monetary policy decisions was a legal matter. The dollar weakened against its major counterparts, with the yen and euro among the top performers.
As the global economic outlook remains uncertain, gold’s appeal as a safe-haven investment is expected to persist, with further volatility likely in the coming days as trade talks and economic data continue to unfold.
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