Gold prices soared past $3,400 per ounce on Monday, reaching new record highs as a combination of geopolitical tensions, trade wars, and domestic political battles in the U.S. sparked a rush for the safe-haven asset. The rally continued despite the UK bullion market being closed for the Easter Bank Holiday, with Chinese gold trading seeing an unprecedented surge.
The surge in gold prices is largely driven by escalating tensions in the U.S.-China trade war, where President Trump has ramped up tariffs on Chinese imports, causing concerns over the global economic impact. At the same time, Trump has been attacking Federal Reserve Chairman Jerome Powell for not cutting interest rates more aggressively, increasing fears that the Fed’s independence may be at risk. This political uncertainty, combined with the weakening U.S. dollar, has pushed investors to seek refuge in gold.
In China, the demand for gold has reached a fever pitch, fueled by a government-backed investment push and a surge in retail and institutional buying. The World Gold Council (WGC) reports that Chinese gold-backed ETFs have experienced strong inflows, contributing to a rapid rise in gold’s value. Despite this, demand for physical gold in India has softened, with some retailers offering discounts due to weaker local purchasing power.
Meanwhile, gold prices in euros and UK pounds have experienced similar fluctuations, though the strength of gold in the global market remains undeniable. While the U.S. stock market showed some recovery, the broader economic uncertainties, including Trump’s tariff policies and Fed rate concerns, have continued to drive investors towards gold.
With the geopolitical backdrop showing no signs of easing, the gold market remains poised for further upward momentum as global demand and macroeconomic conditions continue to push the metal into uncharted territory.
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