Gold hits fresh record as trade war, Powell fire up haven demand

The metal added 3.5% on Wednesday in its biggest one-day gain since March 2023, as the dollar fell to a fresh six-month low

Gold hit another all-time high as warnings from Federal Reserve Chief Jerome Powell about the impact of the trade war fueled volatility on Wall Street, leading to sharp declines in stocks and the dollar.

Bullion rose as much as 0.4% to $3,357.78 an ounce on Thursday, before paring gains. The metal added 3.5% on Wednesday in its biggest one-day gain since March 2023, as the dollar fell to a fresh six-month low. Traders were again whiplashed by a slew of tariff headlines, while Powell quelled hopes the Fed would act quickly to soothe investors, highlighting the unpredictability of tariff announcements from Washington.

“We don’t know that yet, and until we know that we can’t make informed decisions.” said Powell when asked at the Economic Club of Chicago if the central bank would intervene to calm markets. His comments again showed officials are in no hurry to change the central bank’s benchmark policy rate.

Meanwhile, US and Japan kicked off formal trade negotiations in a bid for the Asian powerhouse to avoid higher levies. While the talks didn’t result in an immediate halt on tariffs, Japan’s lead negotiator said the countries will speak again soon as they aim to reach a deal within the 90-day grace period. Trump hailed the talks as “big progress.”

The precious metal has climbed almost 28% this year — outpacing the 27% gain it notched in 2024 — as the escalating trade war creates anxiety over a possible global recession. Meanwhile, the Trump administration is preparing to pressure nations to curb trade with China in negotiations over US tariffs.

In return, China remains defiant. President Xi Jinping — in the midst of a tour to Southeast Asia as he seeks to deter nations from cutting deals with the US at Beijing’s expense — was cited by state media Xinhua News Agency as calling for joint opposition to hegemony, power politics, and camp confrontation.

“The big theme is uncertainty,” which is benefiting gold, said Nicholas Frappell, the global head of institutional market at ABC Refinery based in Sydney. “Uncertainty about the scale and breadth of tariffs, uncertainty over the strategic plan of the US administration, and the degree to which America’s trade partners will respond.”

Gold edged 0.1% lower to $3,338.45 an ounce at 10:25 a.m. in Singapore, still on track for a weekly gain of about 3%. The Bloomberg Dollar Spot Index rose 0.2%, after dropping 0.7% on Wednesday. Silver, platinum and palladium all fell.