Investing.com – Gold prices spiked to a one-month high in mid-morning European trade on Friday as mounting fears over the prospect of a trade war stoked demand for the precious metal.
for April delivery on the Comex division of the New York Mercantile Exchange rose by $13.80, or 1.04%, to $1,341.20 a troy ounce.
Invoking Section 301 of the 1974 Trade Act, U.S. President Donald Trump on Thursday signed a memorandum announcing tariffs on about $50 billion worth of Chinese exports, citing China’s unfair seizure of U.S. intellectual property.
That triggered safe-haven demand, pushing gold prices to an intraday high of $1,343.10, its highest level since February 20, amid fears the move could spark a tit-for-tat trade war with China.
Chinese officials were quick to respond on Friday, warning the U.S. to “”.
“China doesn’t hope to be in a trade war, but is not afraid of engaging in one,” the Chinese commerce ministry responded in a statement in which it outlined plans to target agricultural goods important to rural U.S. regions that tend to support Trump.
The world’s second largest economy announced plans to levy additional duties on up to $3 billion of U.S. imports including fresh fruit, wine and nuts in response to import tariffs Trump announced earlier this month on steel and aluminum, which were due to go into effect on Friday.
Aside from trade war fears further driving gold to weekly gains of around 2%, prices have remained resilient in both the run up to the on Wednesday and the post-decision period despite the central bank hiking its 2019 and 2020 rate hike projections.
The Fed refrained from adding a fourth hike to its forecasts for the year, appearing .
Higher interest rates tend to weigh on demand for gold, which doesn’t bear interest, in favor of yield-bearing investments.
Elsewhere in metals trading, gained 0.90% to $16.535 a troy ounce by 5:58AM ET (8:58GMT), rose 0.62% at $955.00 a troy ounce, traded down 0.36% to $975.40 a troy ounce, while lost 0.69% to $3.003 a pound.
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Source: Investing.com
