Investing.com - Gold prices rose to the days highs on Wednesday as safe haven demand for bullion was boosted by escalating trade tensions after China announced countermeasures against the latest U.S. tariffs.
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange rose $6.90 or 0.51% to $1,344.10 a troy ounce by 04:02 AM ET (08:02 AM GMT).
Worries that protectionist trade policies from the U.S. and China might result in a trade war boosted gold, amid fears over the impact on global economic growth.
China's commerce ministry announced Wednesday reciprocal 25% tariffs on $50 billion of U.S. goods, including autos and chemicals and said the effective date for the new tariffs would be announced at a later time.
The announcement came after the Trump administration late Tuesday announced 25% tariffs on $50 billion of annual imports from China in an attempt to force changes in Beijing's intellectual property practices.
Persistent worries over global trade tensions also weighed on the U.S. dollar.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last down 0.16% to 89.71.
Investors seek out gold as a store of value during times of political or economic uncertainty, while a weaker dollar makes the dollar-denominated metal cheaper for holders of other currencies.
Investors were turning their attention to the latest U.S. employment report and comments by Federal Reserve Chairman Jerome Powell on Friday, which could determine the direction of the U.S. currency.
Signs of increasing wage growth could underline the case for the Fed to raise interest rates at a faster pace.
Expectations of rising rates tend to boost the dollar by making the currency more attractive to yield-seeking investors.
In other precious metal trade, silver futures were up 0.32% to $16.44 a troy ounce, while platinum futures were down 0.67% to $925.10.
Among base metals, copper futures dropped 1.35% to $3.021 a pound.
Concerns over trade tensions pressured copper prices to their weakest levels since December late last month after they hit a nearly four-year high in December.