Gold prices extended gains for the second consecutive session on Thursday, supported by safe-haven demand amid an escalation in the United States-China trade conflict.
By 3:30 pm AEST (5:30 am GMT), spot gold was up $40.37 or 1.3%, trading at US$3,123.52 per ounce.
This follows a strong session on Wednesday, as prices rallied near US$3,080 after U.S. President Donald Trump announced a temporary pause on new tariffs for most nations, excluding China.
Trump said the United States would implement a 90-day pause on planned tariff hikes for all trade partners except China, which faced an immediate increase in tariffs to 125%.
"Gold rallied to record its biggest intraday gain in five years as global markets gyrated in response to trade announcements," ANZ analysts said in a note to clients. "The rise in UST yields appears to have stoked demand for gold as investors shield themselves from the market turmoil."
Analysts noted that ongoing tensions between the two economic superpowers are likely to continue supporting bullion. Gold-backed exchange-traded funds (ETFs) have seen robust inflows in recent weeks, with China accounting for the bulk of fresh demand. According to Bloomberg, a record CNY7.6 billion flowed into gold ETFs last week.
Looking ahead, traders are closely watching the upcoming U.S. consumer price index (CPI) inflation report, due later on Thursday. A hotter-than-expected print could lift the U.S. dollar, potentially capping further gains in gold prices.
