Gold smashes yet another record as trade war fuels | Australian Markets
Gold hit another all-time high as warnings from Federal Reserve Chief Jerome Powell in regards to the influence of the trade war fuelled volatility on Wall Street, resulting in sharp declines in stocks and the greenback.
Bullion rose as a lot as 0.4 per cent to $US3357.78 ($5283.85) an ounce on Thursday, earlier than paring positive factors.
The steel added 3.5 per cent on Wednesday in its largest one-day gain since March 2023, as the greenback fell to a recent six-month low.
Traders have been again whiplashed by a slew of tariff headlines, whereas Mr Powell quelled hopes the Fed would act shortly to assuage traders, highlighting the unpredictability of tariff bulletins from Washington.
“We don’t know that yet, and until we know that we can’t make informed decisions.” he mentioned when requested on the Economic Club of Chicago if the central bank would intervene to calm markets. His feedback again confirmed officers are in no hurry to change the central bank’s benchmark coverage fee.
Meanwhile, US and Japan kicked off formal trade negotiations in a bid for the Asian powerhouse to keep away from increased levies. While the talks didn’t lead to an rapid halt on tariffs, Japan’s lead negotiator mentioned the nations will converse again quickly as they purpose to achieve a deal within the 90-day grace period. Trump hailed the talks as “big progress.”
The treasured steel has climbed virtually 28 per cent this yr – outpacing the 27 per cent gain it notched in 2024 – as the escalating trade war creates nervousness over a doable world recession. Meanwhile, the Trump administration is making ready to strain nations to curb trade with China in negotiations over US tariffs.
In return, China stays defiant. President Xi Jinping – within the midst of a tour to Southeast Asia as he seeks to discourage nations from reducing offers with the US at Beijing’s expense – was cited by state media Xinhua News Agency as calling for joint opposition to hegemony, energy politics, and camp confrontation.
“The big theme is uncertainty,” which is benefiting gold, mentioned Nicholas Frappell, the worldwide head of institutional market at ABC Refinery based mostly in Sydney. “Uncertainty about the scale and breadth of tariffs, uncertainty over the strategic plan of the US administration, and the degree to which America’s trade partners will respond.”
Bloomberg.
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