Gold prices hit new high amid US-China trade war worries
What's the story
Gold prices hit an all-time high on Monday, propelled by fears of global economic growth amid the intensifying US-China trade war. The rally was also supported by a weaker dollar.
Spot gold climbed 1.7% to $3,383.87 per ounce, after touching a record high of $3,384 earlier in the session.
Meanwhile, US gold futures firmed 2% to $3,396 per ounce.
In India, MCX Gold hit a fresh record high of ₹96,747 per 10 grams earlier today.
Market dynamics
Dollar index hits 3-year low, boosting gold's appeal
The dollar index dropped to a three-year low, making gold more attractive for holders of other currencies.
"Fundamentally, markets are pricing in heightened geopolitical risks, driven by US tariff tensions and stagflation concerns," said Yeap Jun Rong, IG market strategist.
He added that "resilient central bank demand offers an added tailwind for prices as well."
Trade tensions
US-China trade tensions and geopolitical issues boost gold demand
US President Donald Trump announced "reciprocal tariffs" on dozens of countries on April 2.
While his administration has paused levies for some countries, it has intensified its trade battle with China.
China has warned countries against making a broader economic deal with the US at its expense.
These escalating tensions have led to increased demand for gold as a safe-haven asset.
Market forecast
Geopolitical tensions and gold's future trajectory
Rong suggested that "the next potential milestone for gold could be around the $3,500 level," although he noted that positioning may appear crowded in the near term.
Technical indicators also suggest near-term overbought conditions.
In other precious metals, spot silver added 0.3% to $32.66 an ounce, platinum gained 0.3% to $969.68 while palladium fell 0.3% to $959.43 per ounce.