Spot gold climbed 2.5% to $3,372.13 an ounce by 2:17 p.m. ET (1817 GMT), after reaching its strongest level since May 8 earlier in the session. The rally coincided with a downturn in global equities as investors faced renewed U.S.-China trade tensions and prepared for a week filled with key economic data and central bank decisions, including a closely watched U.S. jobs report and an anticipated interest rate cut by the European Central Bank.
Peter Grant, vice president and senior metals strategist at Zanier Metals, said recent developments have intensified risk-off sentiment in the market.
“The latest tariff threats on Friday, including plans to double steel and aluminum tariffs to 50%, along with Ukraine’s weekend strikes deep into Russian territory, have heightened geopolitical risks,” Grant said.
Tensions between Washington and Beijing resurfaced after U.S. President Donald Trump accused China of violating a trade agreement to roll back tariffs and export restrictions on critical minerals. In response, U.S. Treasury Secretary Scott Bessent indicated that a call between Trump and Chinese President Xi Jinping may take place soon to address the trade impasse.
Investors are also keeping a close watch on upcoming remarks from Federal Reserve Chair Jerome Powell and other central bank officials for signals on future U.S. monetary policy. Gold typically benefits from lower interest rates and heightened geopolitical instability.
“The current environment of trade war fears, fiscal uncertainty, and U.S. debt ceiling concerns sets the stage for continued market volatility,” said Fawad Razaqzada, market analyst at City Index and FOREX.com. “For gold, this combination of risk aversion and economic uncertainty is particularly supportive.”
In other precious metals, silver prices posted sharp gains. Spot silver jumped 4.7% to $34.54 an ounce, marking its highest level since October 23 after hitting a more than seven-month peak earlier in the day.
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