Gold Prices Hit Record Highs as U.S.-China Trade Tensions Escalate
Gold prices surged to fresh all-time highs on Monday, hovering just below $4,100 per ounce, as renewed U.S.-China trade tensions reignited demand for safe-haven assets like bullion.
By 07:59 ET (11:59 GMT), spot gold climbed 1.4% to $4,074.42 per ounce, while U.S. gold futures advanced 2.3% to $4,093.20 per ounce. Silver also hit a new record, extending the rally across the precious metals market.
The sharp move came after U.S. President Donald Trump intensified his trade dispute with China late last week, rattling global markets and prompting investors to seek refuge in gold. The yellow metal is widely regarded as a store of value and a hedge against uncertainty, often rising during periods of economic or geopolitical tension.
Trade Dispute Fuels Safe-Haven Demand
Tensions flared after Beijing announced expanded export controls on certain rare earth materials, which play critical roles in advanced manufacturing and technology industries. In response, Trump threatened to impose a 100% tariff on Chinese exports to the United States and hinted at new restrictions on U.S. software exports by November 1.
He also suggested there was “no reason” to meet with Chinese President Xi Jinping at the upcoming summit in South Korea, though the meeting has not been officially canceled.
Trump’s remarks reignited fears of a new escalation in global trade hostilities, following months of relative calm after an earlier U.S.-China truce. However, over the weekend, Trump struck a softer tone, saying “everything will be fine” and that Washington was not seeking to hurt China.
Meanwhile, Beijing defended its export restrictions as a necessary response to what it called U.S. “aggression,” though it refrained from introducing fresh retaliatory tariffs.
Analysts at Capital Economics said the dispute could still “blow over if cool heads prevail,” adding that the planned Trump-Xi meeting could serve as a diplomatic off-ramp. However, they cautioned that both sides risk entrenching their positions if negotiations stall.
Fed Rate Cut Bets Add Fuel to Gold’s Rally
The renewed trade conflict overshadowed easing geopolitical concerns following a fragile ceasefire in Gaza, according to analysts quoted by Reuters.
In addition, expectations that the Federal Reserve will cut interest rates at its next meeting on October 28–29 further supported gold’s rally. Fed Chair Jerome Powell is scheduled to speak on Tuesday, with several other policymakers expected to comment later in the week.
So far in 2025, gold prices have surged more than 50%, driven by central bank buying, ETF inflows, and rising confidence in Fed rate cuts. Analysts say the combination of monetary easing, trade uncertainty, and geopolitical risk continues to create a powerful tailwind for the metal.
