In a dramatic turn of events, gold prices surged to an all-time high as escalating trade tensions between the United States and China ignited a rush for safe-haven assets. On [specific date], the price of gold hit a record $2,845 per ounce, marking a gain of over 1%. The rally was fueled by fears surrounding the ongoing trade war, which also pressured the US Dollar. The Relative Strength Index (RSI) currently stands at 74, suggesting that the bullish momentum in gold prices may continue despite the RSI's overbought signals.
The drop in job openings in December, coupled with Chinese tariffs on US goods, further exacerbated market uncertainties. Job openings fell to 7.6 million in December from 8.156 million in November, highlighting potential vulnerabilities in the labor market. Meanwhile, China's imposition of tariffs on key US imports such as coal, LNG, crude oil, farm equipment, and electric trucks has placed additional strain on trade relations.
These developments have taken a toll on the Greenback, which declined by 0.43% to trade below the 108.00 figure against major currencies. The depreciation of the US Dollar has provided additional support for gold prices, as investors seek refuge in the precious metal amid heightened geopolitical risks.
Gold's ascent has been bolstered by falling US yields, as real yields, measured by the 10-year Treasury Inflation-Protected Securities (TIPS), dropped nearly six basis points from 2.13% to 2.072%. Similarly, the US 10-year Treasury bond yield fell by four basis points to 4.51%, reinforcing gold's appeal as a low-risk investment.
Adding to the economic landscape, US Factory Orders fell by 0.9% in December, falling short of forecasts that predicted a 0.7% contraction. This data reflects ongoing challenges within the manufacturing sector and raises questions about the resilience of the US economy in the face of external pressures.
San Francisco Federal Reserve President Mary Daly emphasized that the Fed's job is not yet complete when it comes to tackling inflation. She maintained that the US economy remains robust, indicating optimism despite current hurdles. However, if Federal Reserve speakers adopt a more hawkish stance, it could potentially cap gold's upward trajectory.
The trade war-induced uncertainties have prompted investors to seek safe havens, with gold emerging as a preferred choice. The current XAU/USD trading rate stands at $2,843, reflecting a significant increase of over 1%. As tensions continue to mount, market participants are closely monitoring developments between the two economic giants.