Rising tensions between the United States and China is increasing uncertainty for global markets, as trade disputes and retaliatory threats raise the risk of supply chain disruptions and market volatility.
Gold prices surged above $4,200 per ounce on Wednesday, extending a bullish run as investors sought safe-haven assets amid concerns over economic growth and speculation of further US monetary easing.
Over the past month, gold has climbed 13.5 percent, and is up 56.7 percent compared with the same period last year, according to trading in contracts for difference (CFDs) tracking the benchmark gold market.
The escalation follows President Donald Trump’s accusation that China engaged in “economically hostile” behavior by halting soybean imports, coupled with warnings of potential retaliatory measures, including a cooking oil embargo. China had earlier sanctioned five US-linked units of South Korean shipbuilder Hanwha Ocean, raising concerns of a broader trade confrontation.
US economic indicators show a slowdown in hiring, with the labor market softening and growth showing signs of weakening.
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At the same time, the US government shutdown has begun to affect economic activity, adding another layer of uncertainty for businesses and markets.
The combined impact of trade tensions, policy uncertainty, and slowing domestic growth is contributing to increased market volatility. World commodity prices, particularly soybeans and cooking oil, face disruption, while supply chain interruptions could affect manufacturing and logistics globally.
Investors are increasingly turning to gold and other safe-haven assets, while uncertainty surrounding policy, trade, and economic momentum continues to shape global financial and commodity markets.
