Gold’s price experienced a notable surge, reaching toward $3,090 per ounce. This upward movement was primarily fueled by investors seeking safe-haven assets amidst escalating trade tensions between the US and China. Back-and-forth tariff increases between the two economic giants overshadowed any broader de-escalation efforts, creating uncertainty in the market. Additionally, concerns about inflation and slower growth, as reflected in recent FOMC minutes, added to the demand for gold.
- Gold rose toward $3,090 per ounce, building on a previous gain of over 3%.
- Safe-haven demand drove the price increase due to rising US-China tensions.
- President Trump raised tariffs on Chinese imports to 125% effective immediately.
- China increased duties on US goods to 84%.
- The US lowered duties to 10% for 90 days to support trade talks with most countries.
- FOMC minutes show near-unanimous concerns over higher inflation and slower growth.
- Investors await US CPI and PPI data for insights into the Fed’s interest rate outlook.
- Gold-backed ETFs saw inflows of 226.5 metric tons, worth $21.1 billion, in Q1.
The combination of geopolitical instability and macroeconomic anxieties significantly benefits gold’s appeal. As trade disputes intensify and worries about inflation and economic slowdown persist, investors tend to flock towards gold as a secure store of value, thereby driving up its price. This is further validated by the substantial inflows into gold-backed ETFs, suggesting a broader trend of investors seeking refuge in this precious metal during times of uncertainty.