Gold hits record high as Donald Trump trade war with China intensifies

Gold has risen to a record high as ’s trade war with China intensifies and the US dollar weakens. The price of the precious metal rose to above $3,200 an ounce as investors flock to the so-called “safe haven” asset.

A “safe haven” asset is considered to be something that keeps its value, or goes up in price, during times of economic uncertainty. Asian stocks tumbled on Friday after President Trump slapped , while announcing a with universal 10% tariffs on all other countries. China today announced it will retaliate with its own 125% tariffs.

The dollar also fell sharply, reaching a decade-low against the Swiss franc, which is also considered to be another “safe haven” asset. The dollar dropped as much as 1.2% to 0.81405 Swiss franc.

Rob Mansfield, Independent Financial Advisor at Rootes Wealth Management said: “Everyone is trying to work out what Trump is going to do next. Markets hate uncertainty and so are either euphoric or despondent based on the latest Truth Social post. Gold has a reputation as being a historic store of value so it's not surprising that people are chasing the price of gold higher.“

It comes after the UK grew by more than expected in February. Gross domestic product (GDP) expanded by 0.5%, driven by a boost in manufacturing and production. This is higher than the 0.1% that had been expected by economists, and is an improvement after no growth was recorded in January.

GDP is a measure of the size and health of the economy, with data released by the Office for National Statistics (ONS) every month. However, these figures were before President Trump announced his "Liberation Day" tariffs last week, which are expected to hamper UK growth.

ONS director of economic statistics Liz McKeown said: “The economy grew strongly in February with widespread growth across both services and manufacturing industries. Within services, computer programming, telecoms and car dealerships all had strong months.“

She continued: “While in manufacturing, electronics and pharmaceuticals led the way and car manufacturing also picked up after its recent poor performance. Across the last three months as a whole, the economy also grew strongly with broad-based growth across services industries.”

This week, several major lenders started cutting mortgage rates over expectations that UK interest rates could be cut again next month. The reductions are down to lower interest rate swaps, which move in line with expected changes to the Bank of England base rate.

But personal finance experts have warned that lower interest rates could mean the rates applied to savings accounts could fall, in bad news for UK savers. However, investors are being urged not to make "knee-jerk" movements. Myron Jobson, senior personal finance analyst at Interactive Investor, said: "A great deal of uncertainty still clouds the outlook for UK investors and savers.

"Stock market swings - both upward and downward - are all part of market volatility, which can be unsettling but is a natural feature of investing. Investors should continue to avoid making knee-jerk decisions based on short-term noise and focus instead on their long-term financial goals.

"Maintaining a well-diversified portfolio across different asset classes, sectors, and geographies is key to weathering market turbulence. It’s also a good time to review investment strategies to ensure they remain aligned with your risk tolerance and time horizon."

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