Gold Jumps Past $4,200 On US-China Trade Concerns, Fed Rate Hike Bets

Gold prices surged past $4,200 per ounce in early trading on Wednesday, bolstered by rate cut hopes by the Federal Reserve amid simmering tensions between the U.S. and China over tariffs.

Spot gold prices jumped as high as $4,218 per ounce while U.S. gold futures surged to 1.7% to $4,235.80 per ounce. Retail sentiment on Stocktwits about SPDR Gold Shares ETF (GLD) was in the ‘extremely bullish’ territory at the time of writing.

On Tuesday, Federal Reserve Chair Jerome Powell said that the U.S. central bank will likely decide on monetary policy on a case-by-case basis, while also noting the job market weakness.

“Based on the data that we do have, it is fair to say that the outlook for employment and inflation does not appear to have changed much since our September meeting four weeks ago,” Powell said on Tuesday. The Fed had lowered interest rates by 25 basis points in the previous meeting.

According to CME Group’s FedWatch tool, nearly 96% traders have priced in a 25-basis-point rate cut in the Federal Open Market Committee meeting later this month. Bullion and other precious metals tend to thrive in a low-interest-rate environment as investors use them as a hedge against inflation.

The dollar index, which compares the greenback with a basket of currencies, also slipped 0.2% making the dollar-priced bullion attractive for overseas investors. Spot silver also rose 2.9% to $52.9 per ounce.

Separately, tensions between the U.S. and China have risen again after President Donald Trump said the U.S. might halt its cooking oil trade with China due to Beijing’s reluctance to purchase American soybeans.

“We are considering terminating business with China having to do with Cooking Oil, and other elements of Trade, as retribution. As an example, we can easily produce Cooking Oil ourselves, we don’t need to purchase it from China,” Trump wrote on Truth Social.

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