Gold kicked off the new week on a strong note, reaching a fresh record high in early trading amid renewed tensions in the US-China tariff dispute. US President Donald Trump announced an additional 100% tariff on all Chinese imports and imposed new export restrictions on critical US-made software, effective November 1.
The move came after China tightened its own export rules on rare earths and related technologies, as well as restricted its citizens from engaging in unauthorized overseas mining. However, gold’s rally briefly cooled as investors turned cautious following Trump’s so-called “TACO” (Trump Always Chickens Out) moment on Sunday.
Market sentiment improved significantly after Trump made conciliatory remarks, saying, “I think we’re going to be fine with China.” US Vice President J.D. Vance also emphasized that Trump is open to reasonable negotiations with Beijing.
As risk appetite improved, demand for the US Dollar (USD) as a safe-haven asset weakened, giving additional support to gold. The Greenback also remains under pressure due to the ongoing US government shutdown and the upcoming tariff hike scheduled for November 1.
Looking ahead, gold traders will keep a close watch on further developments in the US-China trade conflict and upcoming speeches from Federal Reserve officials, with few major US economic data releases on the calendar this week. The main focus will be Friday, October 24, when the US Bureau of Labor Statistics releases the Consumer Price Index (CPI) report. Gold bulls are eyeing another weekly gain as the metal’s rally looks set to extend into Asian trading on Friday.