US gold futures settled nearly unchanged at $1,537.20 per ounce. Meanwhile, gold in euro and Australian dollar hit record levels. "There's a great deal of uncertainty and instability in the global financial markets and economies. And in that kind of environment, investors are bouncing around so they are buying in to gold and buying out of gold," said Jeffrey Christian, managing partner of CPM Group.
Washington announced last week an additional 5% duty on $550 billion in targeted Chinese goods, hours after China unveiled retaliatory tariffs on $75 billion worth of US products. Typically, gold is used as a place to park assets during times of global uncertainty. The long drawn-out trade war between the world's two largest economies has roiled markets since it began more than a year ago, triggering fears of a global slowdown.
"Gold prices could fall $100 very quickly if there were a resolution not only to the trade war but to other problems that are out there," Christian said. While monetary policy easing by central banks would be supportive for gold, "the single biggest risk to the recent gold rally would be central bank success, potentially aided by fiscal stimulus or a détente in the trade dispute," a BofA Merrill Lynch Global Research note stated.
In other precious metals, silver gained 1.6% at $17.67, platinum remained unchanged at $853.40 and palladium rose 0.8% to $1,471.70. Silver touched $17.77 an ounce earlier in the session, its highest level since September 2017.