Gold adds to record rally as trade war anxiety lifts demand
Gold prices continued their record run on Wednesday, as investors sought the safe-haven asset amid escalating concerns about a U.S.-China trade war and the potential impact on economic growth.
Spot gold was up 0.8% at $2,865.61 per ounce by 01:59 p.m. ET (1859 GMT), after hitting a record high of $2,882.16 earlier in the session.
U.S. gold futures settled 0.6% higher at $2,893 per ounce.
"Gold continues to be largely influenced by trade uncertainties ... the tariffs with China and the retaliation has the market on edge, so safe-haven flows remain the dominant factor," said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Earlier this week, China retaliated by imposing tariffs on U.S. goods in response to new U.S. tariffs, escalating the trade war, while U.S. President Donald Trump expressed no urgency in speaking with Chinese President Xi Jinping to alleviate tensions.
Meanwhile, the U.S. Postal Service said it will resume accepting all inbound mail and packages from China and Hong Kong on Wednesday, a day after temporarily suspending such service.
Three U.S. Federal Reserve officials warned Trump's trade tariffs could drive inflation, with one suggesting uncertainty over price outlooks warrants slower interest rate cuts.
The ADP National Employment report showed the U.S. economy added 183,000 jobs in the private sector last month, compared with economists' estimate of a rise of 150,000.
"Employment is going to be an important focus this week ... but I don't think that anything is going to materially impact the Fed expectations on the policy, unless it's really out of line," Grant said.
Investors are looking to the U.S. payrolls report on Friday for further clues on the outlook for rates. Bullion is considered an inflation hedge, but higher rates could dampen its appeal as the metal yields no interest.
Spot silver rose 0.8% to $32.36 per ounce, platinum gained 1.8% to $980.95 and palladium added 0.3% to $990.75.
Source: Reuters
