Gold Prices Surge Amid Rising US-China Tensions
Date: October 4, 2025
By: Ayushman Ojha | Investing.com
Gold prices have sharply increased in Asian markets, nearing record highs as escalating trade tensions between the United States and China overshadow recent tariff relief measures announced by President Donald Trump. This surge is driven by heightened demand for safe-haven assets amid fears of a deepening trade conflict between the world’s largest economies.
Gold Market Reaction
As of 02:05 ET (06:05 GMT), spot gold prices jumped 1.6%, reaching $3,123.58 per ounce. Meanwhile, gold futures for June saw an increase of 1.9%, climbing to $3,137.61 an ounce. This spike follows the previous record high of $3,168 per ounce achieved on April 3, prior to a significant correction caused by broader financial market losses which prompted investors to sell gold to cover those losses.
Tariff Developments and Market Sentiment
The renewed momentum for gold began on Wednesday when new tariffs imposed by the U.S. officially took effect. While President Trump announced a 90-day pause on reciprocal tariffs affecting most countries, he simultaneously raised tariffs on Chinese imports to an unprecedented 125%. This contradictory stance has generated significant unease among investors, who are concerned about the potential for further escalations in trade policy.
Concurrently, China enacted its own elevated tariffs of 84% on U.S. imports, further complicating the trade landscape. This unpredictability continues to drive gold’s appeal as a hedge against geopolitical and economic instability.
Currency and Other Precious Metals
The US Dollar Index, meanwhile, decreased by 0.2%, lingering near a six-month low during Asian trading hours. A weaker dollar generally makes gold cheaper for buyers using other currencies, contributing to its rising price.
In addition to gold, other precious metals also experienced gains. Silver futures surged by 2.4%, reaching $31.155 an ounce, while platinum futures climbed 0.6% to $940.20 an ounce. These movements illustrate a broader trend favoring precious metals amid market volatility.
Copper and Economic Outlook
Copper prices, which typically respond to industrial demand, also showed significant movement. On Friday, benchmark copper futures on the London Metal Exchange surged by 4.7% to $9,037.15 a ton. This rally followed Trump’s announcement of the 90-day tariff pause, although analysts remain cautious due to the uncertainty created by high Chinese tariffs.
ING analysts noted, "Clearly, though, there’s still plenty of uncertainty as tariffs against key metal consumer, China, have been raised to 125%." They also suggested that widespread expectations of a prolonged trade war could force China to implement more aggressive stimulus measures, potentially stabilizing both copper and other industrial metals in the near future.
Conclusion
As gold approaches previously set records, the dynamics of US-China trade relations are paramount in shaping market trends. Investors are likely to remain vigilant as they navigate through these turbulent economic conditions, keeping a close eye on both gold and other commodities as safe-haven assets amidst ongoing uncertainty.
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