Gold prices surge by 1% as trade tensions and weakening dollar drive safe-haven flows.

From Investing.com: 2025-02-05 02:19:00

Gold prices surged by 1% on Tuesday as trade tensions between the US and China persisted, leading to safe-haven flows into assets like gold and silver. The weaker US dollar also contributed to the rally, with XAU/USD hitting a multi-year high. Investors are on edge due to escalating global trade tensions and inflation fears. US President Trump’s comments on delaying talks with China may continue to drive the rally. Traders should watch for new tariff developments and US macroeconomic reports for potential impact on XAU/USD.

The euro gained against the US dollar as investors reacted to trade tensions between the US and China, despite Trump suspending tariffs on Mexico and Canada. The eurozone economy faces uncertainty as it may be the next target of Trump’s tariffs, with expectations of a more dovish monetary policy from the ECB compared to the Fed. Traders should monitor US-China trade negotiations and macroeconomic reports for potential impact on EUR/USD.

The British pound rose against the US dollar as the greenback weakened on China’s tariffs on US goods. The US-China trade war escalation may have long-term bearish effects on GBP due to higher US interest rates. Traders should stay cautious ahead of the Bank of England’s interest rate decision, expected to include a rate cut. The decision, along with economic forecasts and officials’ comments, will heavily influence GBP/USD movements. Watch for US macroeconomic reports for potential volatility in the pair.



Read more at Investing.com: Gold Prices Surge Amid a Weakening Dollar and Escalating Trade Tensions