Gold prices surged on Wednesday despite the dollar’s modest gains against most major rivals, with wild gains in most assets following new developments in the trade war.
US President Donald Trump escalated the devastating trade war with China by announcing 125% tariffs on Chinese products.
The tariffs will be immediate and are a response to China’s disrespect to global markets as Trump described it.
Simultaneously, Trump announced a 90-day hold on tariffs for most other countries .
The Chinese government announced fresh retaliatory 84% tariffs on US products, deepening the trade war.
Separately, the Federal Open Market Committee’s meeting minutes showed all members unanimously voted in favor of maintaining interest rates unchanged in March.
The minutes showed concerns about weaker growth due to higher tariffs, but increased spending in some economies reduced such concerns.
Policymakers believe that high inflation could be more resistant than expected, with mounting market uncertainty due to weaker consumer spending and high tariffs.
Otherwise, the dollar index rose 0.1% as of 19:45 GMT to 103.07, with a session-high at 103.3, and a low at 101.8.
On trading, gold spot prices rose 4.2% as of 19:46 GMT, or $125 to $3115 an ounce.
