Gold price hits record high on trade war woes

Gold price scaled a record peak on Monday, spurred by concerns over global economic growth amid the U.S.-Sino trade war, while a weaker dollar further boosted the rally.

Spot gold price advanced 1.4% to $3,373.70 an ounce as of 0432 GMT after hitting a record high of $3,385.08 earlier in the session.

U.S. gold futures firmed 1.8% to $3,386.50. The dollar index hit a three-year low, making gold more attractive for other currency holders.

“Fundamentally, markets are pricing in heightened geopolitical risks, driven by U.S. tariff tensions and stagflation concerns, while resilient central bank demand offers an added tailwind for prices as well,” said IG market strategist Yeap Jun Rong.

U.S. President Donald Trump announced “reciprocal tariffs” on dozens of countries on April 2, and while his administration paused levies for some countries, it has ratcheted its trade battle with China.

On Monday, China warned countries against striking a broader economic deal with the U.S. at its expense, a move Trump is reportedly seeking from countries looking for tariff reductions or exemptions.

On the geopolitical front, Russia and Ukraine accused each other of thousands of attacks that violated the one-day Easter ceasefire declared by President Vladimir Putin, with the Kremlin saying there was no order to extend the pause in frontline fighting. These issues bode well for the safe-haven bullion.

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However, gold’s relative strength index (RSI) stands at 75, indicating that the metal is overbought.

“The next potential milestone for gold could be around the $3,500 level, though positioning may appear crowded in the near term and technical indicators suggest near-term overbought conditions,” Rong said.

Spot silver added 0.4% to $32.71 an ounce, platinum gained 0.3% to $969.65, while palladium fell 0.5% to $957.68.

For centuries, gold has remained a prized precious metal, holding a crucial place in the global economy.

Its worth comes from its rarity, resilience, and universal allure. Often seen as a safe-haven asset, gold is used to safeguard wealth during economic uncertainty.

Investors and central banks hold gold reserves to diversify portfolios and shield against inflation and currency volatility.

Gold’s rate is shaped by numerous factors. Geopolitical tensions or concerns about a severe economic downturn can rapidly drive up gold prices due to its safe-haven appeal.

As a non-yielding asset, gold often rises when interest rates fall, while higher borrowing costs tend to pressure the yellow metal downward.