Gold Hits a New All-Time High As Trump Feuds with China and Fed

Takeaways

• Gold prices reached another record high Monday as trade tensions between the United States and China simmered. President Trump also renewed his criticisms of Fed Chair Jerome Powell.
• Gold has risen about 30% this year as investors, rattled by Trump's unpredictable trade policies, have fled risk assets to ride out tariff uncertainty in traditional safe havens.
• Many fund managers believe that gold, which already has enjoyed a historic run in this year, will continue to benefit from the uncertainty on the stock and bond market.

Gold prices reached another record high on Sunday as tensions with China grew and President Trump continued to attack Federal Reserve Chair Jerome Powell.

Gold futures soared to a new record high of $3,400 for an ounce on Monday morning. They are currently trading 3% higher than that at $3430. Monday’s advance put gold's price up nearly 30% since the start of the year. 

Investors are flocking to gold as a safe haven due to concerns about President Trump’s unpredictable tariff policies. Gold ETFs received $21 billion during the first quarter, the second largest quarterly inflows in their history. 

Gold, which is already at a record high this year after closing more than 20 times, will continue to benefit from the chaos on the stock and bond market. Bank of America surveyed more than 40% of fund manager who said that they expect gold to be this year’s top performing asset.

Market participants de-risked on Monday, after China said that it would retaliate if any country reached a trade agreement with the U.S. which hurt China’s interest. The White House, who paused sweeping duties earlier this month but retained a 145% tax on Chinese products, has said that it is negotiating with dozens of other countries. 

Trump increased anxiety on Wall Street shortly after the opening of the markets when he renewed his attack on Fed Chair Jerome Powell. Trump called for “preemptive’ interest rate cuts on Monday to prevent an economic slowdown. 

Powell, whom Trump appointed Fed chair in 2018, attracted the president’s ire when he said last week that tariffs would likely complicate central bank efforts to tame the inflation and promote a health labor market. Trump responded by saying Powell’s “termination couldn’t come faster.” Kevin Hassett is the top economic advisor at the White House. He told reporters that the administration is looking into the possibility of removing the Fed chairman.