Gold hits record high as US-China trade war intensifies, dollar weakens

Gold Hits Record High as US-China Trade War Intensifies, Dollar Weakens

April 10, 2025

Gold prices soared to a new all-time high today as escalating tensions in the US-China trade war rattled global markets and drove investors toward the safety of precious metals. The surge in gold came alongside a weakening US dollar, further fueling demand for the traditional safe-haven asset.

Record-Breaking Rally

Spot gold rose to an unprecedented $2,475 per ounce in early trading, surpassing the previous high set in 2024. The metal has climbed more than 20% since the start of the year, with analysts pointing to a perfect storm of geopolitical uncertainty, inflation fears, and declining confidence in the greenback.

"Gold is benefiting from a flight to safety," said Maria Chen, senior commodities strategist at GlobalEdge Markets. "With the US and China locking horns again over trade tariffs and currency manipulation accusations, investors are looking for stability, and gold is delivering."

Trade War Escalation

The latest round of tariffs, announced this week by both Washington and Beijing, has reignited fears of a prolonged trade standoff between the world's two largest economies. The US slapped an additional $60 billion in tariffs on Chinese electronics and industrial goods, prompting swift retaliation from China with countermeasures targeting American agriculture and technology sectors.

Markets responded sharply. The Dow Jones Industrial Average fell nearly 700 points on Wednesday, while the S&P 500 and Nasdaq also posted significant losses. Asian and European markets followed suit, deepening concerns over a global economic slowdown.

Dollar on the Defensive

Meanwhile, the US dollar index dropped to its lowest level in over a year, weighed down by soft economic data, growing expectations of interest rate cuts from the Federal Reserve, and skepticism about Washington's ability to manage both domestic economic pressures and its complex international trade relationships.

“The dollar is facing a credibility crisis,” noted James Albright, chief currency analyst at Sterling Bank Group. “Investors are starting to price in not just rate cuts, but also the possibility that America’s trade strategy could backfire, putting even more strain on the currency.”

Outlook for Gold

With the dollar weakening and geopolitical risks rising, many analysts expect gold's bullish momentum to continue. Central banks have also been notable buyers, with recent reports showing increased gold reserves among emerging-market nations wary of over-reliance on US assets.

"Unless we see a sudden breakthrough in trade negotiations or a surprise tightening by the Fed, gold's upward trajectory looks set to continue," said Chen. "Investors are bracing for volatility, and that makes gold more attractive than ever."

As the global economic landscape grows more uncertain, gold’s record run may just be the beginning of a longer-term trend toward hard assets and away from the traditional pillars of financial stability.