Gold hits record high as US-China trade war stokes haven demand

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Gold hits record high as US-China trade war stokes haven demand

Gold rose to a record high, after advancing by almost 1 per cent in the previous session, as the opening salvos of the US-China trade war stoked haven demand.

Bullion reached an all-time peak above $US2861 ($4556.) an ounce on Wednesday.

That came after President Donald Trump hit ******** imports with a 10 per cent tariff the day before, prompting a swift but more targeted retaliation from Beijing.

The response from China was relatively muted compared to Trump’s first term, when Beijing hit back with tariffs that were almost on par with the US, but there’s still plenty of trepidation about the impact on the world’s two biggest economies.

Markets are also waiting to see if there are any ripple effects for US monetary policy if tariffs reignite inflation.

Adding to the uncertain

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, Trump proposed that the US take over the Gaza Strip and assume responsibility for reconstructing the war-torn territory, during a press conference with Israeli Prime Minister Benjamin Netanyahu.

The precious metal should benefit from increasing unease about what lies ahead, although it may lose some of its lustre if interest rates stay high.

A gauge of the dollar fell, extending losses following a US jobs report on Tuesday that pointed to a gradual slowdown in the labor market. A weaker greenback makes commodities like gold cheaper for most buyers.

“Who doesn’t like a safe-haven in this scenario?,” said Charu Chanana, a strategist at Saxo Capital Markets Pte.. “No good news on US-China talks and more geopolitical angst with the Gaza news would continue to provide a further boost to gold, irrespective of where the US dollar goes.”

Spot gold rose 0.7 per cent to $US2861.22 ($4556) an ounce as of 6:29 a.m. in London.

The Bloomberg Dollar Spot Index was down 0.1 per cent, after a 0.7 per cent loss on Tuesday. Silver and platinum climbed, while palladium dropped.

Trade-war fears had jolted precious-metals markets even before Trump went ahead with the tariffs on China.

US prices of gold and silver have surged above international benchmarks in recent weeks, prompting dealers and traders to rush huge volumes of the metals into America before any tariffs take effect. The chaos also led to a spike in lease rates for gold and silver – the return that holders of metal in London’s vaults can get by loaning it out on a short-term basis.

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