Gold prices soar to all-time high amid US-China trade tensions
What's the story
Gold prices have skyrocketed to an all-time high, fueled by renewed trade tensions between the United States and China. As of 5:59am GMT, spot gold was trading at $4,043.14 per ounce after hitting an all-time high of $4,059.3 earlier in the day. The surge in prices is driven by safe-haven demand as investors look for stable investments amid global economic and political uncertainties. The US Federal Reserve's anticipated interest rate cuts are also contributing to gold's upward trajectory.
Market response
Gold futures jump over 1.5% in US
US gold futures for December delivery also rose by 1.5% to $4,059.6. The non-yielding bullion has jumped a whopping 54% year-to-date due to geopolitical risks, central bank purchases, ETF inflows and tariff-related economic concerns, among other factors. "Non-yielding bullion" refers to physical gold or silver (bullion) that does not generate regular income for the investor, unlike stock or bonds or saving accounts.
Trade dynamics
Trump imposes tariffs on Chinese imports, triggering gold price surge
The recent spike in gold prices can be attributed to the latest round of tariffs imposed by President Donald Trump on Chinese exports. The US has slapped additional tariffs of 100% on Chinese goods and announced new export controls on critical software from November 1. China has called these measures hypocritical while defending its own curbs on rare earth elements and equipment exports.
Economic outlook
Fed likely to cut rates as geopolitical tensions escalate
The markets are expecting a near-certain 25-basis-point rate cut this month, with another similar reduction likely in December. Federal Reserve Chair Jerome Powell is scheduled to speak at the NABE annual meeting on Tuesday, which could give fresh monetary easing cues. Meanwhile, several world leaders including Trump will meet in Egypt on Monday to discuss ceasefire plans for Gaza amid ongoing geopolitical tensions.