As the threat of a trade war with China cast a shadow over Wall Street early Wednesday, April 4, the price of gold, which is considered a safe-haven asset, jumped.
In morning trading Wednesday, gold futures for June delivery gained 0.72% to $1,346.90 per troy ounce. At the same time, the SPDR Gold Shares ETF (GLD) - Get Report rose 0.77% to $127.27. The spike in gold prices Wednesday morning came in conjunction with a sharp decline in U.S. stocks.
The stock market opened deep into the red Wednesday after China announced it would hit the U.S. with reciprocal 25% tariffs on more than 100 U.S. products. The tariffs come as China's answer to President Donald Trump's recent proposal to enact $50 billion worth of tariffs against the country.
A rally in gold prices could suggest investors are considering fleeing to safe-haven assets such as the yellow metal, which is typically anticipated to increase or at least retain its value even during times of market turbulence.