Investing.com – Gold prices spiked to a one-month high in morning trade in the U.S. on Friday as mounting fears over the prospect of a trade war and worries of heightened geopolitical tensions stoked demand for the precious metal.
U.S. President Donald Trump announced tariffs on Thursday for about $50 billion worth of Chinese exports, citing China’s unfair seizure of U.S. intellectual property.
Chinese officials were quick to respond on Friday, warning the U.S. to “pull back from the brink”.
“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.
Adding to risk-averse sentiment, Trump named John Bolton as his National Security Adviser late Thursday. Bolton is known for calls to use military force against both North Korea and Iran.
The general news flower triggered safe-haven demand, pushing gold prices to an intraday high of $1,350.40, its highest level since February 20.
for April delivery on the Comex division of the New York Mercantile Exchange were last up by $17.80, or 1.48%, to $1,347.20 a troy ounce at 11:06AM ET (15:06GMT).
Aside from trade war fears further driving gold to weekly gains of more than 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 less hawkish than some traders had feared.
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 1.18% to $16.580 a troy ounce by 11:07AM ET (15:07GMT), rose 0.32% at $952.10 a troy ounce, traded down 0.28% to $976.25 a troy ounce, while lost 0.86% to $2.998 a pound.
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Source: Investing.com
