By Anmol Choubey and Anushree Mukherjee
Gold prices reached an all-time peak on Monday, driven up by worries about worldwide economic expansion fueled by the escalating trade conflict between China and the U.S., coupled with a declining dollar which added momentum to the surge.
Spot gold had advanced 1.7% to $3,383.87 an ounce as of 0246 GMT, after hitting a record high of $3,384 earlier in the session.
U.S. gold futures rose 2% to reach $3,396.10.
The U.S. Dollar Index reached its lowest point in three years, which made gold more appealing for investors holding other currencies. [USD/]
“In essence, markets are reflecting increased geopolitical risks due to U.S. tariff tensions and worries about stagflation. However, strong demand from central banks also provides additional support for these price levels,” according to IG market strategist Yeap Jun Rong.
On April 2, U.S. President Donald Trump declared “reciprocal tariffs” targeting numerous nations. Although his administration temporarily halted these duties for certain countries, they have intensified their trade dispute with China.
On Monday, China cautioned nations against entering into an expanded economic agreement with the United States that could come at China’s expense, as President Trump is apparently pushing for this kind of arrangement from countries aiming for reduced tariffs or exceptions.
In the meantime, Trump initiated a barrage of criticisms directed at Federal Reserve Chairman Jerome Powell on Thursday, as his team assessed the possibility of removing him from his position.
In terms of geopolitics, both Russia and Ukraine blamed each other for numerous attacks that contravened the 24-hour Easter truce announced by Russian President Vladimir Putin. The Kremlin stated that there were no instructions issued to prolong the cessation of hostilities along the front lines.
These concerns augur positively for gold as a safe-haven asset.
The upcoming possible target for gold might be approximately the $3,500 mark; however, the short-term landscape seems congested, and technical indicators point towards oversold conditions in the immediate future, as stated by Rong.
Silver spot increased by 0.3% to reach $32.66 per ounce, platinum rose by 0.3% to hit $969.68, whereas palladium dropped by 0.3% to stand at $959.43.
(Reported by Anmol Choubey and Anushree Mukherjee in Bengaluru; Edited by Sumana Nandy and Savio D’Souza)
