Gold prices surged on Thursday, bouncing back from a significant drop the previous day. Investors took advantage of the dip, buying the precious metal amid ongoing concerns about U.S.-China trade relations.
As of 0907 GMT, spot gold climbed 1.6% to $3,340.79 per ounce. This comes after a 3% drop on Wednesday, marking the sharpest decline since late November. Despite this short-term setback, gold has remained resilient, rising over 27% this year.
The recent dip-buying behavior highlights a continued belief in gold as a safe haven. Many investors see the precious metal as a hedge against global instability. According to experts, “Given the still-evident tailwinds for this precious metal, gold bugs could ultimately conquer the $3,500 level with conviction.”
The primary catalyst for gold’s rise is ongoing uncertainty surrounding U.S.-China trade tensions. These tensions have led to a volatile global market, with investors seeking assets like gold for security. As trade talks between the U.S. and China continue, the precious metal remains a key focus for many investors.
The International Monetary Fund (IMF) recently downgraded its growth forecast for both the U.S. and global economies. The IMF cited President Trump’s tariff policies as a major factor behind the reduction. The IMF now predicts U.S. economic growth will slow to 1.8%, down from its previous forecast of 2.7%.
However, U.S. Treasury Secretary Scott Bessent remains optimistic about U.S. growth. He stated that if the current administration’s policies are followed, growth could exceed the IMF’s estimates. Bessent also mentioned that the excessive tariffs between the U.S. and China are unsustainable. He emphasized that these tariffs must be reduced before any meaningful trade progress can be made.
Supporting gold’s rise, the U.S. dollar eased, making gold more affordable for international buyers. Despite the strong performance of gold, other precious metals showed mixed results. Spot silver fell 0.5% to $33.37 per ounce, while platinum held steady at $973.25. Palladium, on the other hand, dropped by 0.6% to $939.53.
In summary, gold prices have shown resilience amid the ongoing U.S.-China trade tensions. As investors continue to flock to the metal for stability, its performance will likely remain closely tied to future developments in trade talks.
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