Gold price reaches new record high due to tariff dispute between USA and China

In morning trading, the gold market rally continued on Wednesday. The price for an ounce rose to as much as $3,317 (approximately 31.1 grams), which represents a new high. By the end of the morning, the gold price was quoted at $3,305. This is still about $74 or around 2.3 percent more than the previous night.

Tariff Dispute Between USA and China: No Hope for an Early Agreement

Previously, US President Donald Trump had escalated the tariff dispute with China. "The ball is in China's court. China needs to make a deal with us. We don't have to make a deal with them," quoted spokeswoman Karoline Leavitt from a statement by the President. Additionally, the US government tightened restrictions on shipments of AI chips to China. All of this dampens hopes that the two world economic rivals could soon reach an agreement. Global economic concerns are thus not diminishing. Since President Trump took office in January and the start of the erratic tariff policy of the new US administration, gold has gained around 20 percent in value.

"Alongside the Swiss franc, gold is one of the main beneficiaries of the flight to safe assets," commented analyst Ricardo Evangelista from the British trading house Activtrades. In contrast, confidence in US government bonds has been shaken by American trade policy. "Storm clouds are gathering," commented Stephen Innes from the Swiss asset manager SPI Asset Management. Gold is currently in demand as a necessary hedge. Furthermore, the recent decline in the US dollar is also driving stronger demand for gold. Since gold is generally traded in dollars on the world market, a weak US currency increases the demand for gold.

(APA/Red)

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