FX.co ★ Gold Jumps as Trade War Fears Escalate

Gold prices experienced a significant increase of nearly 3%, rising above $3,060 per ounce on Wednesday. This surge was attributed to heightened demand for safe-haven assets amidst escalating fears of a full-scale trade war, leading to concerns of a potential global recession. In response to rising tensions with the United States, China announced an increase in its reciprocal tariffs on U.S. goods, raising them to 84% from a previous rate of 34%. This development came on the heels of President Trump's decision to impose substantial tariffs on multiple nations, notably elevating duties on Chinese imports to 104%. Additionally, Trump disclosed plans on Tuesday to introduce a significant tariff on pharmaceutical imports soon. The upward momentum in gold was further supported by data from the World Gold Council, which revealed that gold-backed exchange-traded funds (ETFs) attracted inflows of 226.5 metric tons, valued at $21.1 billion, in the first quarter. This marked the most significant inflow seen in the past three years.