Gold Prices Soar Amid US-China Trade War Concerns
LONDON — The price of gold has surged to a new high as investors express growing concerns over the ongoing trade tensions between the US and China.
Reaching $3,357.40 (£2,540) per ounce on Wednesday, spot gold experienced a significant spike before slightly decreasing from its peak. Since the beginning of the year, the value of gold has increased by approximately one-third.
The recent surge in gold prices can be attributed to remarks made by the head of the US central bank, who warned that President Donald Trump’s tariff policies could lead to slower economic growth, higher prices, and increased risks of unemployment.
During a speech at the Economic Club of Chicago, Federal Reserve chair Jerome Powell emphasized that the escalating trade war and imposition of higher tariffs could potentially result in a decline in US economic growth and a rise in consumer prices.
Gold is often considered a safe-haven asset by investors during periods of economic uncertainty, and its current popularity has led Stephen Innes, head of trading and market strategy at SPI Asset Management, to describe it as being in “full lifeboat mode” and “the most crowded trade on the planet.”
Analysts have drawn parallels between the current surge in gold prices and the Iranian Revolution of the late 1970s, when gold prices soared by nearly 120% in just a few months. Last month, gold surpassed the $3,000 per ounce mark for the first time, reflecting growing concerns about the impact of global trade tensions.
Investors have increasingly turned to gold as a hedge against inflation and perceived government instability, with Jesper Koll from Monex Group describing it as a “trust hedge” in uncertain times.
The Trump administration’s imposition of tariffs on Chinese imports and threats of additional tariffs on other countries have heightened fears of inflation, prompting investors to seek refuge in safe-haven assets like gold.
President Trump’s aggressive tariff policies, including taxes of 145% on Chinese imports, have raised concerns about potential economic repercussions and uncertainty surrounding future trade relationships.
With the trade war between the US and China showing no signs of abating, investors continue to closely monitor developments and seek out assets like gold to protect against market volatility and economic instability.
