WASHINGTON (dpa-AFX) - Gold prices jumped over 2 percent on Wednesday, as a weaker dollar and rising U.S.-China tensions boosted safe-haven demand for the precious metal.
Spot gold surged 2.4 percent to $3,303.70 per ounce in European trade while U.S. gold futures were up 2.6 percent at $3,322.94.
Traders pondered the effects of U.S.-China trade war on inflation and global economic growth.
China now faces up to a 245 percent tariff on imports to the United States as a result of its retaliatory actions, the White House said in a statement on Tuesday evening, prompting a greater demand for bullion.
The announcement came as President Donald Trump signed an executive order launching an investigation into the national security risks associated with U.S. reliance on imported critical minerals.
The U.S. dollar continued to weaken as recession fears loomed, and a top Federal Reserve official said the U.S. central bank would be forced to quickly make a series of 'bad news' rate cuts if Donald Trump follows through on his threat to resume big reciprocal tariffs after the pause.
All eyes will be on Federal Reserve Chair Jerome Powell, when he speaks at The Economic Club of Chicago later in the day.
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