Gold reached a record high of $2,845 late Tuesday during the North American session as the US Dollar tumbled, weighed down by falling US Treasury bond yields. The "trade war" between the United States (US) and China sparked a flight to the yellow metal's safe-haven status. The XAU/USD trades at $2,843, up more than 1%.
Geopolitical issues are driving bullion prices. Although US President Donald Trump delayed tariffs on Mexico and Canada, duties of 10% on Chinese goods kicked in, sparking retaliatory actions by China.
China applied tariffs on specific products, such as coal, Liquefied Natural Gas (LNG), Crude Oil, farm equipment and electric trucks imported from the US. Additionally, it has decided to impose controls on exports of some metals, which are critical for electronics.
The escalation of the US-China trade war weighed on the Greenback, which, according to the US Dollar Index (DXY), fell 0.43%, below the 108.00 figure.
Therefore, the non-yielding metal is set to extend its rally, initially towards $2,850, ahead of the $2,900 figure.
However, Federal Reserve (Fed) speakers could cap Gold's advance if they become slightly hawkish. San Francisco Fed President Mary Daly said the Fed's job is not done on inflation, adding that the US economy is in a good place and the Central Bank is in a strong position to wait and see and assess tariffs' impact.
Source : FXStreet
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