World gold prices set new record as trade war concerns rise

World gold prices continued to rise in the trading session on April 21 due to the tariff war. Photo: Getty

Spot gold rose 1% to $3,361.53 an ounce. U.S. gold futures rose 1.4% to $3,375.90 an ounce. The dollar index hit a three-year low, making gold more attractive to holders of other currencies.

Gold, seen as a hedge against political and economic uncertainty and inflation, has risen more than 27% year-to-date. Demand in India was muted last week as higher prices curbed buying, while premiums remained flat in top consumer China.

The moves come amid growing investor concerns about US President Donald Trump's aggressive tariff stance and escalating tensions with Federal Reserve Chairman Jerome Powell. The US leader has raised concerns about the Fed's independence and criticized Powell's warning that tariffs "will likely create at least a temporary increase in inflation" and that rate cuts are unlikely.

President Donald Trump later called on the Fed to cut borrowing costs, adding: "If I wanted him out, he would be out very quickly." But Mr Powell said he had no plans to step down anytime soon, declaring that he considered the bank's independence over monetary policy a "matter of law".

On April 20, a Boeing plane scheduled to be used by a Chinese airline returned to the company's production center in the US, becoming a "victim" of bilateral retaliatory tariffs initiated by Donald Trump.

Last week, President Trump ordered an investigation into possible new tariffs on all critical minerals imported into the United States, a move that escalates tensions in disputes with global trading partners and is an effort to pressure industry leader China.

Several countries have moved to reach agreements with Washington to avert the worst of the White House’s tariffs, with Japan the most influential economy. But China warned on April 21 not to seek a deal that would harm Beijing’s interests.

While the rest of the world is hit with a 10% tariff, China faces tariffs of up to 145% on many products. Beijing has responded with 125% tariffs on Washington goods.

A spokesperson for China's Ministry of Commerce warned that this approach "will ultimately fail on both sides and harm both sides."

The comments came after Donald Trump said the US was in talks with China over tariffs, expressing confidence the world's two largest economies could reach a deal to end their bitter trade war.

According to News.az

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