Gold ended yesterday’s trading session with a 1.87% gain, snapping a two-day pullback from its historic peak at $3,500/oz. This rebound occurred as trade optimism faded, while rising geopolitical risks and stalled negotiations among major powers continued to fuel defensive sentiment across financial markets.
Previously, gold had surged to an all-time high of $3,500/oz as the U.S.–China trade conflict intensified and evolved into a broader strategic confrontation. The recent actions from both sides — including tighter trade controls, confrontational rhetoric, and signs of indirect retaliation — suggest a lack of willingness to engage in meaningful talks and a growing escalation on both economic and policy fronts.
Earlier this week, markets were cautiously hopeful for renewed negotiations following more conciliatory remarks from the U.S. However, yesterday’s hardline statements from Beijing erased any near-term optimism, as Chinese officials firmly denied the existence of any ongoing talks and demanded the U.S. withdraw all unilateral trade measures.
This directly contradicted President Trump’s claim that discussions were “still ongoing” with China. The conflicting narratives swiftly shifted investor sentiment back toward risk aversion.
Gold once again benefited from its role as a strategic haven, as investors sought protection amid the rising threat of global trade fragmentation and deteriorating confidence in policy stability.
If trade tensions continue to escalate, especially in parallel with the ongoing diplomatic deadlock surrounding the Russia–Ukraine conflict, systemic risks are unlikely to be resolved in the near term. Such an environment further strengthens gold’s position as a top-tier safe-haven asset.
In addition, the economic data released yesterday provided mixed signals. Initial jobless claims came in at 222,000, in line with expectations but slightly higher than the previous reading of 216,000, indicating that the labour market remains stable, albeit no longer overly tight.
In contrast, existing home sales in March dropped to 4.02 million units, well below expectations of 4.14 million and sharply down from February’s 4.27 million. This highlights the prolonged impact of high interest rates on the real estate sector and consumer demand.
The recent flow of mixed economic data points to a gradual slowdown in U.S. economic growth, while inflation continues to show signs of easing. This reinforces investor confidence that a rate-cutting cycle could begin as planned in September.
As such, the outlook for gold remains broadly positive. With growth momentum slowing, rate-cut expectations becoming more concrete, and geopolitical risks still elevated, gold is fundamentally supported. If these key factors persist, the precious metal is well-positioned to sustain the strong uptrend that has been building since the beginning of the year.
By Linh Tran, Market Analyst at XS.com
