April 21 (Reuters) – Gold prices surged to a record high on Monday, spurred by concerns over global economic growth due to the spiralling Sino-U.S. trade war, with a weaker dollar further boosting the rally.
Spot gold had advanced 1.7% to $3,383.87 an ounce as of 0246 GMT, after hitting a record high of $3,384 earlier in the session.
U.S. gold futures firmed 2% to $3,396.10.
The dollar indexn hit a three-year low, making gold more attractive for other currency holders.
“Fundamentally, markets are pricing in heightened geopolitical risks, driven by U.S. tariff tensions and stagflation concerns, while resilient central bank demand offers an added tailwind for prices as well,” said IG market strategist Yeap Jun Rong.
U.S. President Donald Trump announced “reciprocal tariffs” on dozens of countries on April 2 and while his administration has paused levies for some countries, it has ratcheted up its trade battle with China.
China on Monday warned countries against striking a broader economic deal with the United States at its expense, a move Trump is reportedly seeking from countries seeking tariff reductions or exemptions.
Meanwhile, Trump launched a series of attacks against Federal Reserve Chair Jerome Powell on Thursday, with his team evaluating whether they could fire Powell.
On the geopolitical front, Russia and Ukraine accused each other of thousands of attacks that violated the one-day Easter ceasefire declared by President Vladimir Putin, with the Kremlin saying there was no order to extend the pause in frontline fighting.
These issues bode well for the safe haven bullion.
“The next potential milestone for gold could be around the $3,500 level, though positioning may appear crowded in the near term and technical indicators suggest near-term overbought conditions,” Rong said.
Spot silver added 0.3% to $32.66 an ounce, platinum gained 0.3% to $969.68, while palladium fell 0.3% to $959.43.
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