Gold holds near record high as trade war stokes haven demand
Gold held near a record high in Asian trading, after rising by almost 1% in the previous session, as the opening salvos of the US-China trade war stoked haven demand.
Bullion reached an all-time peak above $2 845 an ounce on Tuesday as President Donald Trump hit Chinese imports with a 10% tariff, prompting a swift but more targeted retaliation from Beijing. A gauge of the dollar fell - making gold cheaper for many buyers — with losses accelerating after a US jobs report pointed to a gradual slowdown in the labor market.
The response from China was relatively muted compared to Trump’s first term, when Beijing hit back with tariffs that were almost on par with the US, but there’s still plenty of trepidation about the impact on the world’s two biggest economies. Markets are also waiting to see if there are any ripple effects for US monetary policy if tariffs reignite inflation. The precious metal should benefit from the uncertain outlook, although may lose some of its luster if interest rates stay high.
Spot gold declined 0.1% to $2 841.13 an ounce as of 8:07 a.m. in Singapore. The Bloomberg Dollar Spot Index rose 0.1%, after a 0.7% loss on Tuesday. Silver and palladium dipped, while platinum edged higher.
Trade-war fears had jolted precious-metals markets even before Trump went ahead with the tariffs on China. US prices of gold and silver have surged above international benchmarks in recent weeks, prompting dealers and traders to rush huge volumes of the metals into America before any tariffs take effect. The chaos also led to a spike in lease rates for gold and silver — the return that holders of metal in London’s vaults can get by loaning it out on a short-term basis.
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