Gold prices briefly hit record high over $3,500/oz on fiscal, tariff concerns

Investing.com-- Gold prices steadied in Asian trade on Wednesday, briefly hitting record highs as persistent concerns over global fiscal health and U.S. trade tariffs kept traders biased towards safe haven assets.

But gold’s gains were held back by a recovery in the dollar, which recouped a bulk of its losses this week as a selldown in government bonds across the globe pushed traders into U.S. markets. 

The yellow metal, along with its precious and industrial peers, was still sitting on strong gains so far this week. 

Among industrial metals, London copper futures briefly rose above $10,000 a ton for the first time since March, amid increasing optimism that demand in top importer China will improve.

Spot gold steadied at $3,534.61 an ounce, while gold futures for December rose 0.3% to $3,601.15/oz by 00:26 ET (04:26 GMT). Spot gold briefly hit a record high of $3,547.09/oz earlier in the session. 

Gold underpinned by fiscal concerns, tariff uncertainty

Gold’s gains this week initially came after a U.S. appeals court ruled that most of President Donald Trump’s trade tariffs were illegal, and that he could only keep them in place until mid-October.

Trump chided the ruling and said he will appeal with the Supreme Court. Still, any further rulings against Trump’s tariffs could force Washington into renegotiating recent trade deals, which heralds more disruption in global trade. 

Adding to the risk-off mood, global bond yields rose across the board on Tuesday amid mounting concerns over high debt levels in the developed world. But a sell-off in global bonds fueled some strength in the dollar, which in turn limited gold’s advance.

The dollar faces a major test later in the week with key nonfarm payrolls data for August. The print is likely to factor into the Federal Reserve’s plans to cut interest rates.

Fed fund futures were pricing in an over 90% chance the Fed will cut interest rates by 25 basis points later this month, CME Fedwatch showed. Growing bets on rate cuts had also boosted metal markets in recent weeks. 

Other precious metals retreated after clocking strong gains earlier in the week. Spot platinum fell 0.6% to $1,402.46/oz, remaining close to an over one-month high. Spot silver fell 0.3% to $40.7505/oz after hitting a 14-year high.

Copper buoyed by China demand hopes

Among industrial metals, benchmark copper futures on the London Metal Exchange fell 0.2% to $9,978.0 a ton, after briefly crossing $10,000 a ton for the first time since March. COMEX copper futures fell 0.3% to $4.6285 a pound, falling from a one-month high. 

Copper’s gains this week were driven chiefly by optimism over improving demand in top copper importer China, as media reports said Beijing was preparing a fresh round of stimulus measures.

Purchasing managers index data from China for August showed some resilience in the economy, although Beijing will likely have to do more to shore up growth.