Gold prices continued to hover near record levels, supported by escalating trade war fears between the U.S. and China, as well as rising geopolitical uncertainty following U.S. President Donald Trump’s recent comments on Gaza.
Spot gold surged by 0.7%, reaching $2,862.05 per ounce, after hitting an all-time high of $2,882.35 earlier in the day. Meanwhile, gold futures for April delivery rose 0.2% to $2,882.11 per ounce. Safe haven demand for gold was bolstered by ongoing concerns over the U.S.-China trade dispute, which intensified earlier this week after Trump imposed a 10% tariff on Chinese goods. In retaliation, China announced its own tariffs and export controls, escalating tensions between the two countries.
The precious metal also received a boost from the weakening U.S. dollar, which erased earlier gains after Trump delayed trade tariffs on Mexico and Canada. However, there was no relief for China, leaving market sentiment largely biased toward safe-haven assets like gold.
U.S.-China Trade Tensions Fuel Gold’s Surge
The U.S.-China trade war continues to stoke market uncertainty, with Trump’s tariffs on Chinese imports now in effect. In response, Beijing has retaliated with a range of measures, including tariffs on U.S. goods, export controls, and actions against U.S. companies such as Google (NASDAQ:GOOGL).
Despite the escalation, Trump showed little interest in negotiating with Chinese President Xi Jinping, signaling a prolonged period of trade tension. Analysts warn that the ongoing trade war could disrupt global trade, strain economic growth in the world’s largest economies, and drive up U.S. inflation. This environment, while beneficial for gold in the short term, may eventually erode the precious metal’s long-term appeal if interest rates rise due to higher inflation.
Trump’s Gaza Proposal Sparks Geopolitical Concerns
In addition to trade tensions, Trump’s controversial remarks about the Gaza Strip further fueled safe-haven demand. During a White House meeting with Israeli Prime Minister Benjamin Netanyahu, Trump suggested that the U.S. would “take over” the Gaza Strip and resettle Palestinians in neighboring countries. His proposal, which marked a dramatic shift from decades of U.S. policy, was met with swift condemnation from Palestinian leaders and Arab nations, amplifying fears of renewed instability in the Middle East.
This geopolitical uncertainty contributed to increased demand for gold, as investors sought refuge in the precious metal amidst rising tensions.
Market Overview: Precious Metals and Industrial Metals
Other precious metals saw mixed performance on Wednesday. Platinum futures gained 0.6%, reaching $1,018.70 per ounce, while silver futures declined by 1%, settling at $32.703 per ounce. Industrial metals also showed positive movement, with copper futures rising by 1% to $9,267 per ton on the London Metal Exchange. March copper futures increased by 2%, reaching $4.4383 per pound.
As the U.S.-China trade war and geopolitical tensions in the Middle East persist, gold remains a key asset for investors seeking security in uncertain times. However, experts warn that any prolonged trade tariffs could potentially impact global inflation and interest rates, influencing gold’s long-term prospects.
Conclusion
Gold prices remain elevated as global uncertainties, particularly the U.S.-China trade war and geopolitical tensions in Gaza, continue to drive demand for safe-haven assets. The recent surge in gold prices underscores the market’s reaction to escalating trade disputes and the potential for prolonged economic instability. While gold is benefiting from these factors in the short term, analysts caution that persistent trade tariffs could exert upward pressure on inflation and interest rates, which may impact gold’s long-term value. As geopolitical and economic risks persist, gold and other precious metals will likely continue to play a key role in investors’ portfolios seeking stability in uncertain times.
Related topics：
- What is the Value of 18K Gold?
- Why Does Gold Price Increase During War?
- What is the Best Price Being Paid for Gold Sovereigns?
