Dollar falls to three-year low as gold hits record high following Trump's latest moves
Photo: Donald Trump (Getty Images)
Gold prices have surged to a record high due to the escalation of the trade war between China and the United States. The weakening of the dollar further intensified the rise, Reuters reports.
Spot gold prices rose by 1.7% to a record high of $3,384 per ounce. The dollar index reached a three-year low, making gold more attractive to holders of other currencies.
"Fundamentally, markets are pricing in heightened geopolitical risks, driven by US 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.
Trade wars and geopolitical tensions
On April 2, US President Donald Trump announced the imposition of "reciprocal tariffs" on dozens of countries. Although his administration suspended the introduction of levies for some countries, it has intensified the trade battle with China.
The Chinese side has warned countries against entering into a larger economic deal with the United States at its expense. According to available data, Trump is pushing for this from countries that are seeking tariff reductions or exemptions.
Meanwhile, on Thursday, Trump began a series of attacks on Federal Reserve Chair Jerome Powell, and his team was assessing whether to fire Powell.
On the front between Russia and Ukraine, thousands of attacks were recorded, violating the one-day Easter ceasefire declared by Vladimir Putin. At the same time, the Kremlin stated that it had not received an order to extend the pause in fighting on the front line.
As Reuters notes, these issues are promising good results for the safe-haven bullion.
"The next potential milestone for gold could be around the $3,500 level," said Rong.
The National Bank of Ukraine is monitoring the situation in global financial markets, where the dollar is depreciating against the euro. The main currency peg in Ukraine is the dollar. Meanwhile, the National Bank of Ukraine is working on the prospect of a comprehensive transition to the euro.
