Gold prices held firm around $4,130 per ounce on Tuesday, staying close to record highs as investors piled into safe-haven assets amid escalating US–China trade tensions and growing expectations of US interest rate cuts.
The yellow metal briefly touched a new intraday high before stabilizing, with traders balancing risk sentiment against global economic uncertainties. The rally reflects a surge in safe-haven demand following renewed hostilities between the world’s two largest economies.
China on Monday announced sanctions against five US units of South Korean shipbuilder Hanwha Ocean, a move widely seen as retaliation for recent US export restrictions. In response, President Donald Trump threatened to impose additional 100% tariffs on Chinese imports, deepening fears of a new round of tit-for-tat economic measures that could weigh on global trade.
The geopolitical strain has driven investors to seek refuge in gold, traditionally viewed as a store of value in times of turmoil. Analysts say the metal’s resilience also reflects broader market anxiety over the prolonged US government shutdown, now entering another week without resolution.
US Treasury Secretary Scott Bessent warned that the fiscal impasse is beginning to drag on economic activity, adding to concerns about growth prospects heading into the fourth quarter.
Meanwhile, the focus now shifts to Federal Reserve Chair Jerome Powell’s remarks at the NABE annual meeting later today. Investors are eager for clues on the Fed’s next steps after recent data signaled slowing job growth and softer inflation. Markets are currently pricing in an almost certain 25-basis-point rate cut in October, with another reduction expected by December.
Lower interest rates typically support gold prices by reducing the opportunity cost of holding non-yielding assets, while also weakening the dollar, further enhancing bullion’s appeal.
For now, gold remains one of the few assets maintaining upward momentum amid a landscape of economic caution, policy shifts, and geopolitical friction.
