With U.S.-China trade tensions simmering once again and tariff hikes adding fuel to the fire, investors are retreating to the age-old safety of gold. The precious metal posted solid gains Monday, signaling a growing wave of market apprehension.
Spot gold rose 0.7% to $3,311.33 per ounce, while U.S. futures advanced 0.6% to $3,335.40. This move follows the Biden administration’s decision to raise tariffs on key imported metals, a response to what officials describe as “persistent unfair practices” by China in the global trade arena.
Beijing’s Ministry of Commerce quickly issued a statement denouncing the move, warning of possible retaliation. This tit-for-tat stance is amplifying fears of a prolonged standoff that could dampen economic growth and rattle financial markets.
“The risk environment has changed,” said Clara Benson, Senior Market Analyst at Luminex Advisors. “The safe-haven allure of gold is a reflection of investor nerves, especially when uncertainty spans multiple continents.”
The rally in gold was further supported by a declining U.S. dollar, which tends to boost demand among foreign buyers by making the metal more affordable in other currencies. Moreover, despite inflationary pressures, Fed Governor Christopher Waller said the central bank could ease monetary policy later this year if economic conditions warrant it — another tailwind for gold.
Silver posted a similar gain, rising 0.3% to $33.08 an ounce, while platinum and palladium slipped slightly as investor appetite for industrial metals remained subdued.
For investors, gold’s recent gains represent more than just a short-term reaction. Many see it as a hedge in an environment where policy direction and international diplomacy remain unpredictable.
