Gold prices today (4.7) fell to a 3-week low, continuing to decline in the context of a widespread wave of sell-offs in the market as investors sold gold to make up for losses in other transactions due to concerns about a global economic downturn as the trade war escalated.
Spot gold prices fell 0.1% to $3,034.02/ounce as of 6:37 a.m. on April 7, GMT. At the beginning of the trading session, gold bar prices fell more than 1% to their lowest level since March 13.
Gold prices fell more than 3% on February 2 after President Donald Trump's larger-than-expected tax measures affected the global market.
China has responded with a series of retaliatory measures, including a 34% additional tax on all US goods and limiting exports of some rare earth metals.
"There is much confusion and uncertainty in the market about the possibility of a cooling down in the future when tensions are at their current level, with many sides still struggling to find a quick solution," said IG market strategist Yeap Jun Rong.
Gold is often a safe haven asset during times of uncertainty. The decrease in gold prices has led experts to believe that investors are selling gold to make a profit or compensate for losses in other assets.
Worries about a global recession caused US stocks to fall $6,000 billion last week and sent Japan's average Nikkei index down nearly 9% on April 7.
Meanwhile, in March, the Chinese Central Bank added gold to reserves for the fifth consecutive month.
"It is clear that central banks still want to add gold to their reserves, thereby continuing to promote the gold market" - Tim Waterer, head of market analysis at KCM Trade, said, predicting that gold will continue to be an asset purchased by central banks, thereby helping to maintain the upward momentum of gold prices.
