On Thursday (April 10th), influenced by the weakening of the US dollar and the escalation of the US-China trade war, the price of gold surged by nearly 3%, reaching a historical high. Investors are optimistic about the hedging function of precious metals.
According to Reuters, the spot price of gold rose by 2.6% to $3,160.82 per ounce at 1:54 pm Eastern Time on Thursday, hitting a high of $3,171.49 earlier in the session.
The price of US gold futures rose by 3.2% to $3,177.5 per ounce.
US President Trump announced on Wednesday a temporary delay in imposing high retaliatory tariffs on dozens of countries, but increased tariffs on Chinese goods from 104% to 145%.
Nikos Tzabouras, a senior market analyst at Tradu.com, stated: “Gold has regained its hedging function and is poised to reach a historical high.”
However, the prospect of reaching agreements with trading partners poses a significant risk to the upward potential of gold, which could bring pressure to gold prices. Additionally, the diminishing expectations of interest rate cuts by the Fed could create resistance for gold, thus boosting the US dollar.
Simultaneously, the US dollar index fell by over 1% against other currencies, making gold cheaper for holders of other currencies.
Data released on Thursday showed a decrease in the US Consumer Price Index in March, but inflation risks are expected to rise following Trump’s doubling of tariffs on Chinese goods.
Following the data release, traders are betting that the Fed will resume interest rate cuts in June, potentially lowering its policy rate by a full percentage point by the end of the year.
Alex Ebkarian, Chief Operating Officer of Allegiance Gold, commented: “We see central banks around the world buying (gold), so as long as we see money flowing into ETFs and escalating currency policy risks, there are many key driving factors that will continue to support gold prices.”
In terms of other precious metals, the spot price of silver fell by 0.5% to $30.88 per ounce, platinum fell by 0.5% to $932.41, and palladium dropped by 1.4% to $918.45.