Gold hits record high as China-US tariff war drives safe-haven demand

GOLD prices touched an all-time-high on Wednesday (Feb 5), underpinned by safe-haven demand after China responded to US tariffs, which were initially imposed by President Donald Trump on the world’s largest consumer of gold.

Spot gold was up 0.2 per cent at US$2,847.33 per ounce, as at 0044 GMT, after hitting a record high of US$2,848.94 earlier in the session. US gold futures steadied at US$2,876.10.

China swiftly hit back with tariffs on US imports, intensifying the trade war between the world’s two largest economies, even as Trump granted temporary reprieves to Mexico and Canada.

Trump said on Tuesday he sees no urgency in speaking with Chinese President Xi Jinping to ease a growing trade war, sparked by his sweeping 10 per cent tariffs on all Chinese imports.

The market views the tariffs as inflationary, potentially boosting safe-haven demand for bullion, which is traditionally seen as a hedge against both rising prices and geopolitical turmoil.

Data showed US job openings in December fell to 7.6 million, falling short of the consensus estimate of eight million, indicating a potential economic slowdown.

Key economic data on investors’ radar this week includes the US employment report on Friday and the ADP employment report, due later in the day, both of which are expected to offer crucial insights into the economy’s overall strength.

San Francisco Fed president Mary Daly said that the Federal Reserve plans to take its time in evaluating its next interest rate move, carefully assessing incoming economic data and the effects of tariff, immigration, and other policy shifts under the Trump administration.

Spot silver added 0.2 per cent to US$32.15 per ounce, platinum edged 0.3 per cent higher to US$966.50, and palladium was flat at US$990.75. REUTERS