Gold price rebounds on trade war worries

March 4, 2018

Beijing-China (Mar 4)  Gold jumped back on Friday as the talk of global trade war pushed stocks and the dollar lower.

The most active gold contract for December delivery rose 18.2 dollars, or 1.39 percent, to settle at 1323.40 U.S. dollars per ounce.

U.S. President Donald Trump has announced the imposition of high tariffs on all U.S. steel and aluminum imports, prompting criticism at home and abroad and resulting in the plunge of U.S. stocks.

Investors are worried that a potential trade war with U.S. partners will eventually hurt U.S. economy as well.

If the Trump administration goes ahead with the heavy tariffs, other countries will take retaliatory actions against U.S. exports, said observers. Some U.S. sectors relying on imported steel will also face increasing costs.

The Dow Jones Industrial Average fell 137.78 points, or 0.56 percent as of 1811 GMT. When equities post losses, the precious metal usually goes up, as investors are looking for a safe haven such as gold.

Meanwhile, the U.S. dollar index, a gauge of the greenback against a basket of other major currencies, went down 0.23 percent to 90.03 as of 1800 GMT.

Gold and the dollar typically move in opposite directions. If the dollar weakens, gold futures will rise as gold, measured in U.S. dollar, becomes more attractive to investors using other currencies.

As for other precious metals, silver for May delivery rose 19 cents, or 1.17 percent, to settle at 16.466 dollars per ounce. Platinum for April went up 7.30 dollars, or 0.76 percent, to close at 965.10 dollars per ounce.

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