Gold continued its five-day rally above $4,200 as uncertainty over the trade conflict between the United States and China prompted investors to shift their capital to safe haven assets.
At 9.15 am, gold prices were at $4,221, up 0.35% since it opened in early trading Thursday in the Asian session.
The trade conflict between Washington and Beijing remained supportive of bullion prices, with US President Donald Trump saying he was considering cutting some trade ties with China after a tariff spat last weekend.
So far this year, gold prices have risen more than 60% on geopolitical uncertainty, expectations of a Fed rate cut, central bank purchases and strong ETF inflows.
Earlier, US Treasury Secretary Scott Bessent proposed a truce on tariffs on Chinese products, aimed at resolving the rare earths issue, but gold investors brushed aside his comments and pushed the yellow metal past the $4,200 mark for the first time.
On Tuesday, Fed Chairman Jerome Powell was dovish, acknowledging the weakness in the labor market, and adding that the central bank should move to a more ‘neutral’ interest rate.
In terms of labor market data, employment and hiring levels were stable across regions and sectors. In addition, reports showed signs of stagflation, as the economy is not stabilizing amid a high inflation scenario.
Gold is expected to continue to rise, amid a limited US economic docket.
The addition comes as the ongoing US government shutdown enters its fifteenth day and shows no signs of an agreement between the White House and Democrats.
