Gold prices broke previous records, hitting an all-time high, as escalating trade tensions between the United States and China stoked global economic concerns. This rise reinforces the weakness of the US dollar, making the precious metal an increasingly attractive safe haven for investors around the world.
Gold prices rose today to an all-time high, driven by escalating concerns about global economic stability as the trade dispute between the United States and China escalates. The traditional role of the precious metal as a safe haven has been reinforced by the significant weakening of the US dollar.
Spot gold hit a record high of $3,384 an ounce during the trading session, before settling slightly below $3,383.87, recording a significant increase of 1.7%. Similarly, US gold futures saw a strong uptrend, rising 2% to $3,396 an ounce. This rise reflects a global trend towards safe haven, amid growing economic uncertainty.
Weaker dollar boosts gold’s appeal to international investors
The depreciation of the US dollar is a major factor contributing to the remarkable rise of gold. The dollar index fell to a three-year low, making dollar-denominated assets, such as gold, more attractive to investors holding other currencies. This inverse correlation usually boosts demand for gold when the dollar weakens in global markets.
Geopolitical tensions boost demand for safe-haven assets
Market analysts stress that growing geopolitical risks, mainly caused by the ongoing trade dispute between the US and China, are a major catalyst for gold’s bullish trajectory. US President Donald Trump’s recent announcement of “-for-tat tariffs” on several countries, coupled with an intensifying trade battle with China, has exacerbated concerns about the prospects for global economic growth. China has reacted firmly, warning other countries against entering into economic agreements with the United States that could harm their economic interests.
Gold shines as dollar weakens and tensions escalate
Gold prices rose to a new record high of over $3.30 an ounce on Monday, driven by a weaker U.S. dollar and growing concerns about the stability of the global economy. Silver followed by a wide margin, trading near $33 as industrial demand stabilized.
Investors shifted their capital to safe-haven assets amid escalating trade turmoil and declining growth indicators.
The US dollar index (DXY) fell to a three-year low, reducing the cost of dollar-denominated metals for international buyers. “Markets are increasingly minding structural risks – ranging from trade disruptions to long-term inflation – while the continued accumulation of reserves by central banks provides additional support,” said Yip John Rung, strategist at IG.
This shift in currency sentiment comes as the Trump administration pushes ahead with wide-ranging tariff plans.
While some countries have granted waivers, the focus remains on China, where trade talks have stagnated. In response, Beijing warned against bilateral deals that could undermine its position in the ongoing negotiations.
Uncertainty about the Federal Reserve and geopolitical risks shape the market trend.
Investors are also keeping an eye on the Federal Reserve’s developments, as speculation about the leadership continues. The White House has reportedly reconsidered discussions to replace its chairman, Jerome Powell, a move that would further complicate monetary policy indicators at a time when inflation remains uneven and growth momentum is fragile.
At the same time, geopolitical instability – particularly across Eastern Europe – exacerbates the prevailing state of caution in financial markets. Despite the announcement of a temporary ceasefire, reports of renewed conflict have raised doubts about any real de-escalation of tensions in the near term.
Gold is targeting $3404 and silver is awaiting a breakout of 33.11$
Gold is targeting USD$3,404, with optimists defending a key support near USD$3,368, while silver is holding above USD$32.63, with bullish probabilities remaining at USD$33.11 unless volume confirms a breakout.
The gold pair (XAU/USD) is trading around $3,390 after a sharp rebound from the support of the price channel near USD$3,316. The bullish structure remains, supported by the 50-day exponential moving average at $3,286 and the broader ascending price channel.
As momentum recovers, immediate resistance is at USD$3,404 and USD$3,425. Breaching above the upper trend line could accelerate gains towards USD$3,448. On the downside, USD$3,368 represents the nearest support level, followed by the main $3,346 and $3,316 regions.
So far, buyers are still dominant, but price action is approaching a major turning point. A clear breakout above USD$3,404 with a strong trading volume may confirm the continuation of the trend, while not breaking out may result in a short-term consolidation.
Silver (XAG/USD) is trading near USD$32.86, regaining bullish momentum after rebounding from trend line support and recovering the 50-day exponential moving average at USD$32.35. A rebound from $32.12 confirms that buyers are defending the uptrend, with the price now targeting the resistance level at $33.11.
Breaching above this level could open the way towards $33.50, possibly $33.91. On the downside, immediate support holds steady at $32.63, followed by $32.14. The overall trend remains positive, while silver is holding above the uptrend line.
Momentum is building, but the market has repeatedly echoed near $33.00 – traders should keep an eye out for a clear breakout. For now, technical indicators are in favor of the bulls, but continued trading volume will be key to maintaining gains.
