Quick overview

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The bullion asset continued its remarkable rise to a new all-time high, surpassing $4,200 as markets assess the latest news regarding US-China relations.

Gold has continued its rally for the third consecutive session, starting the week with a strong bullish momentum and rising more than 4 percent in recent days. Renewed trade tensions between the United States and China have fueled consistent demand for gold as a crucial safe-haven asset, and buying pressure remains strong. In the upcoming sessions, bullish momentum may become even more pronounced on the chart as these tensions escalate. Last week’s final session marked a significant turning point for market risk sentiment.

The Chinese government was found to have obstructed the export of rare earth minerals, which are vital to the United States. In response, the U.S. announced tariffs of up to 100 percent on certain Chinese imports. It has implemented tariffs on ships coming from the U.S. and has begun banning subsidiaries connected to U.S. companies, while China has not retaliated directly against these tariffs.

The actions announced by the Trump administration are scheduled to take effect on November 1st, but if no early agreements are reached, both parties may further increase tariff levels.

The upcoming weeks will be critical in determining whether the two largest economies in the world are on the verge of a new trade war, especially since there have been no tangible negotiations to ease tensions thus far.

The potential effects on the global economy toward the end of the year remain uncertain, contributing to a surge of economic instability due to the resurgence of trade hostilities. This has led to capital flowing out of riskier assets, particularly U.S. stocks, as investors seek safe-haven assets like gold.

Equities have become increasingly volatile. In times of market turbulence, gold tends to reaffirm its position as the premier safe-haven asset, drawing steady short-term demand. Even before the recent trade dispute, the volume of gold futures trading had been rising steadily, reaching levels not seen since early September, with over 500,000 contracts traded.

Open interest—an indicator of all outstanding futures positions—remains stable at approximately 485,000 contracts, indicating no significant capital outflows. This supports the ongoing bullish trend for gold and underscores the demand for gold futures. Trading volume is expected to increase if trade tensions continue to escalate.