Gold climbed more than 2% Wednesday and was poised for its best day since October 2023, supported by safe-haven inflows amid escalating U.S.-China trade tensions as U.S. President Donald Trump further increased tariffs on China.
Spot gold was up 2.6% at $3,059.76 an ounce, as of 2:23 p.m. ET (1823 GMT), slightly paring gains from the near $3,100 high hit earlier in the session, after Trump announced a stay on tariffs for all countries except China.
U.S. gold futures rose 3% to settle at $3,079.40.
"Ultimately gold continues to be seen as a hedge against instability here. We got a situation where tariffs are becoming a big problem, and you have inflationary expectations going higher, and that's manifested by higher yields," said Bart Melek, head of commodity strategies at TD Securities.
Trump said he authorized a 90-day pause on new tariffs for many countries, even as he escalated tariffs on imports from China, raising the rate on the world’s second-largest economy to 125%, effective immediately.
Fearing that tariffs would stoke inflation and hinder economic growth, investors fled stocks and industrial commodities to take refuge in gold.
Gold, used as a safe investment during times of political and financial uncertainty, has risen more than $400 in 2025 and hit a record high of $3,167.57 on April 3, owing to strong safe-haven demand and central bank buying.
Federal Reserve policymakers were nearly unanimous last month in warning that the U.S. economy faced risks of higher inflation alongside slower growth, with some noting "difficult tradeoffs" may lie ahead, according to the minutes of the meeting.
Traders are pricing in a 72% chance of a Fed rate cut in June, according to the CME Fedwatch Tool.
Zero-yield bullion tends to thrive in a low interest rate environment.
Investors now look to the U.S. consumer price index due on Thursday for more clarity.
Elsewhere, silver gained 3.1% to $30.8 an ounce, platinum slipped 1.2% to $931.87, and palladium was up 1.9% at $923.75.