Gold prices extended their gains on Wednesday, driven by ongoing uncertainty surrounding U.S.-China trade relations and broader global economic concerns, which continued to fuel demand for safe-haven assets. A weaker U.S. dollar also lent additional support.
As of 0209 GMT, spot gold was up 0.6% at $3,370.67 per ounce, while U.S. gold futures rose 0.5% to $3,394.90.
“We’re seeing dip-buyers returning, and today’s rally in Asia can also be linked to the unwinding of recent dollar strength,” said Kelvin Wong, Senior Market Analyst for Asia Pacific at OANDA. “Uncertainty remains, particularly in the trade dynamics between China and the U.S., and even between the U.S. and the EU.”
Gold is widely viewed as a safe-haven investment during times of economic instability.
China’s Foreign Minister Wang Yi urged the U.S. to help steer bilateral relations back on “the right track” during a meeting with the U.S. ambassador to Beijing on Tuesday. Meanwhile, the White House indicated that Presidents Donald Trump and Xi Jinping may hold talks later this week to address ongoing trade tensions.
In another development, the U.S. announced it would not proceed with plans to double tariffs on steel and aluminum imports from the U.K.
The U.S. dollar index edged down 0.1%, making gold—priced in dollars—more affordable for buyers using other currencies.
Global economic worries intensified after the Organisation for Economic Co-operation and Development (OECD) warned Tuesday of a sharper-than-anticipated slowdown, attributing much of the drag to the Trump administration’s trade policies.
“(The OECD report) for sure will be another supporting factor to see safe demand being heated up as well from a medium-term perspective,” Wong said.
Economic data showed US job openings rose in April, though layoffs surged to their highest level in nine months, hinting at softening labor market conditions.
Federal Reserve officials reiterated their cautious policy stance on Tuesday, citing risks from trade tensions and economic uncertainty.
Elsewhere, spot silver rose 0.3 per cent to $34.59 an ounce, platinum was up 0.5 per cent to $1,079.62 and palladium was steady at $1,009.94.
