Gold prices pushed higher on Wednesday as a combination of concerns over ongoing trade tensions between the U.S. and China and the prospect of a U.S. military strike in Syria bolstered safe haven demand for the precious metal.
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange were up $1.7 or 0.13% to $1,347.60 a troy ounce by 04:21 AM ET (08:21 AM GMT).
Chinese President Xi Jinping and U.S. President Donald Trump both made conciliatory remarks on trade on Tuesday, which investors hope could pave the way for negotiations to avert a full blown trade war between the world’s top two economies.
But investors remained cautious following a report saying that early talks had already broken down.
Adding to market jitters, the U.S. and its Western allies are discussing a possible military strike on Syria in response to an alleged chemical attack over the weekend. Russia has urged the U.S. to refrain from taking military action, amid rising tensions between the two powers.
The dollar drifted lower ahead of U.S. inflation data and the minutes of the Federal Reserve’s latest meeting later in the day.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.09% to 89.24.
Investors seek out gold as a store of value during times of market turmoil and political tensions, while a weaker dollar makes the dollar-denominated metal less expensive for holders of other currencies.