Gold’s haven status has been underpinned this week, with President Donald Trump’s flip-flopping on tariffs sparking frantic selloffs for US stocks, bonds and the dollar, as fears of a worldwide recession engulfed Wall Street. In particular, the selloff in US government bonds highlighted eroding appetite for US assets and prompted questions about whether the nation’s debt remains a haven.
“Gold’s very strong recovery back to a fresh all-time high sent a signal that all is not well,” said Ole Hansen, head of commodity strategy at Saxo Bank AS. “Its continued strength suggests that despite the tariff pause, underlying concerns remain—geopolitical and economic tensions, mounting fiscal debt, and ongoing central bank demand.”
With tariffs at levels now set to halt almost all trade between the US and China, the concern now is that the economic fight between the world’s biggest economies could spill into other areas of the relationship. China retaliated against Trump’s latest tariffs by hiking duties on all US goods, while calling the administration’s actions a “joke” and saying it no longer considers them worth matching.
“Gold is the best place to be in the market now,” said Liu Yuxuan, a Shanghai-based precious metal researcher at Guotai Jun’an Futures Co. “The unprecedented trade tension has deepened the distrust of US dollar, intensifying the demand for” other safety assets.
See also: Gold holds gains as Trump tax bill stokes US deficit concerns
Gold’s 23% rally this year has also been boosted by central bank buying and hopes for more Federal Reserve monetary easing.
Spot gold was up 1.9% to US$3,236.92 an ounce as of 11.45am in New York. The Bloomberg Dollar Spot Index fell for a fourth day. Silver and platinum were higher while palladium fell.
