Gold adds to record rally as trade war anxiety lifts demand

Gold prices continued their record run on Wednesday, as investors sought the safe-haven asset amid escalating concerns about a US-China trade war and the potential impact on economic growth.

Spot gold was up 0.8% at USD 2,865.61 per ounce by 01:59 p.m. ET (1859 GMT), after hitting a record high of USD 2,882.16 earlier in the session.

US gold futures settled 0.6% higher at USD 2,893 per ounce.

“Gold continues to be largely influenced by trade uncertainties … the tariffs with China and the retaliation has the market on edge, so safe-haven flows remain the dominant factor,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Earlier this week, China retaliated by imposing tariffs on US goods in response to new US tariffs, escalating the trade war, while US President Donald Trump expressed no urgency in speaking with Chinese President Xi Jinping to alleviate tensions.

Meanwhile, the US Postal Service said it will resume accepting all inbound mail and packages from China and Hong Kong on Wednesday, a day after temporarily suspending such service.

Three US Federal Reserve officials warned Trump’s trade tariffs could drive inflation, with one suggesting uncertainty over price outlooks warrants slower interest rate cuts.

The ADP National Employment report showed the US economy added 183,000 jobs in the private sector last month, compared with economists’ estimate of a rise of 150,000.

“Employment is going to be an important focus this week … but I don’t think that anything is going to materially impact the Fed expectations on the policy, unless it’s really out of line,” Grant said.

Investors are looking to the US payrolls report on Friday for further clues on the outlook for rates. Bullion is considered an inflation hedge, but higher rates could dampen its appeal as the metal yields no interest.

Spot silver rose 0.8% to USD 32.36 per ounce, platinum gained 1.8% to USD 980.95 and palladium added 0.3% to USD 990.75.

(Reporting by Anmol Choubey in Bengaluru; Editing by Andrea Ricci, Chris Reese, and Shounak Dasgupta)