Gold jumps over 3% as dollar weakens, trade tensions escalate

Gold bars

Gold prices extended gains on Wednesday, closing above $3,300 an ounce as a weaker US dollar and rising trade tensions fueled by President Donald Trump’s protectionist policies boosted demand for the safe-haven asset.

June gold futures rose 3.3% to settle at $3,324.5 an ounce.

The gains came as the US dollar index, which measures the greenback against six major currencies, dropped 0.83% to 99 as of 9:59 p.m. Mecca time.

Investors remained cautious amid persistent uncertainty surrounding Trump’s protectionist trade agenda, which has raised concerns about a potential recession in both the US and global economies.

In a speech earlier in the day, Federal Reserve Chair Jerome Powell warned that US tariffs are undermining the central bank’s ability to contain inflation and support economic growth.

He added that such protectionist measures could further stoke inflation in the world’s largest economy and destabilize the labor market.