As the trade battle develops and the dollar continues to decline, gold crosses $3,200. Gold broke the $3,200 mark on Friday as investors fled fears of a recession, a sinking dollar, and a trade war between the United States and China. At 2:30 p.m. Eastern Time, spot gold was trading at $3,235.89 per ounce, representing a gain of more than 2% from its previous high of $3,245.28 earlier in the day. This week, the price of bullion has increased by almost 6%. At $3244.6, US gold futures experienced a 2.1% increase.
Gold is the favored safe-haven asset in the world that have been torn apart by Trump’s trade war. In light of the fact that trading partners are losing faith in the United States, commodities expert James Cooper stated that the United States currency has weakened and that US Treasuries are selling off. The disagreement between the two greatest economies in the world reached a new level on Friday, when China increased its tariffs on products imported from the United States to 125 percent.
The decline in the value of the dollar resulted in lower prices for buyers of bullion from other countries. This year, gold’s ascent has been further bolstered by the purchasing of central banks, the forecasting of a rate cut by the United States Federal Reserve, geopolitical instability, and investor flows into gold-backed exchange-traded funds (ETFs).
Despite the unexpected decrease of 0.4% in producer prices in the United States in March, import tariffs are likely to cause inflation to rise. The Federal Reserve is anticipated to reduce interest rates once again in June, and by 90 basis points by the year 2025. “A minor correction (for gold) wouldn’t surprise, but the path forward is up and away as CPI and PPI give the Fed more room to cut and will keep downward pressure on the dollar,” said Tai Wong, an individual who trades commodities.
When interest rates are low, non-yielding gold is a good investment because it may protect against inflation and global uncertainty. A research report from UBS analysts pointed to “easing geopolitical tensions, a return to more cooperative trade relations, or a significant improvement in the US macro and fiscal backdrop.” gold’s price could be slowed down.
Compared to platinum, which fell by 0.2% to $936.36 per ounce, silver increased by 3.2% to $32.18 per ounce. The price of palladium increased by 0.7% to $914.87.