Gold Hits Record High as Dollar Weakens Amid Trump Tariff Tensions, Fed Feud

Gold prices soared to a historic peak above $3,384 per ounce Monday as investors sought safe havens amid escalating global trade tensions and a brewing conflict between President Trump and Federal Reserve Chair Jerome Powell. The dollar extended its decline against major currencies as markets digested the dual threats to economic stability.

The rally in the precious metal coincided with new developments in the trade war. China issued strong warnings to countries considering bilateral agreements with Washington. In retaliation, Beijing imposed 125% tariffs on key imports from the U.S. Meanwhile, Japan has become the latest economy to negotiate separate terms with the White House.

“Appeasement will not bring peace,” China’s Commerce Ministry declared, invoking a vivid metaphor: “To seek one’s temporary selfish interests at the expense of others’ interests is to seek the skin of a tiger.” This followed Trump’s Thursday comments expressing confidence about reaching a deal with China despite the ongoing dispute.

Dollar Under Pressure From Dual Fronts

The greenback’s decline accelerated amid:

1. Trade Policy Uncertainty: Trump’s blanket 10% global tariffs and 145% China-specific levies
2. Central Bank Tensions: Public feud between Trump and Fed Chair Powell over interest rate policy

French Finance Minister Eric Lombard voiced growing international concern: “Donald Trump has hurt the dollar’s credibility with his aggressive moves on tariffs, for a long time.” Chicago Fed President Austan Goolsbee reinforced the importance of central bank independence.

Asian markets showed divergent responses:

• Declines: Tokyo (-0.8%) and Taipei (-0.3%) were weighed down by currency strength
• Gains: Shanghai (+1.2%), Seoul (+0.7%), and Southeast Asian markets advanced
• Commodities: Oil prices dipped on demand concerns, while gold’s rally accelerated

Investors await key April manufacturing indicators to assess early trade war impacts. SPI Asset Management’s Stephen Innes noted: “The reputational hit to the U.S. brand is real…American policymaking is now a geopolitical variable, not a given.”

Read: Gold Prices in Pakistan Stable at Rs349,700 per Tola, Silver Unchanged

The surge in haven assets and dollar weakness signals deepening market scepticism about a near-term resolution to trade conflicts or institutional tensions between the White House and the Federal Reserve.