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Gold Prices Soar Amid U.S.-China Trade War Fears

Gold prices surged on Wednesday, driven by escalating concerns over a potential new trade conflict between the United States and China. This uptick follows China’s recent decision to implement customs duties on American imports in retaliation to new tariffs imposed by the United States on Chinese goods.

In immediate trading, gold increased by 0.2 percent, reaching $2848.69 per ounce by 02:53 GMT, following a session high of $2853.97. Meanwhile, U.S. gold futures also rose by 0.2 percent, achieving $2879.70.

U.S. President Donald Trump indicated on Tuesday that he is in no rush to engage in discussions with Chinese President Xi Jinping aimed at de-escalating the ongoing trade tensions between the globe’s two largest economies.

In response to the tariffs, China announced targeted customs duties on U.S. imports and communicated potential sanctions to various companies, including Google.

Elia Spavak, the head of global economy at the acquisition firm, noted, “The next significant benchmark for gold may be the $3000 level… China might be encouraged to increase its gold purchases as reserves should the trade war intensify.”

On another front, three officials from the U.S. Federal Reserve cautioned on Monday that the Trump administration’s trade policies pose inflationary risks, with one official suggesting that the uncertainty surrounding price expectations may necessitate a more cautious approach to interest rate adjustments.

Gold is traditionally viewed as a hedge against inflation; thus, rising interest rates could diminish its appeal among investors.

In other precious metals, silver saw a 0.2 percent increase, trading at $32.15 per ounce. Platinum gained 0.3 percent, reaching $966.95, while palladium experienced a decline of 0.9 percent, falling to $981.75.

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