Gold strode towards US$1,600 an ounce as the US-China trade war worsened, hurting the outlook for global growth and boosting demand for the traditional haven as risk assets suffered.
Bullion futures rallied as much as 1.8 per cent to US$1,565 an ounce on the Comex, the highest since 2013. Silver spot prices rose as much as 2.1 per cent. The advances in this week's opening session followed last Friday's gains.
"Gold has demonstrated its safe-haven qualities and we stay long," UBS Group analysts Giovanni Staunovo and Wayne Gordon said in a report yesterday.
Gold is again proving to be a store of value in times of crisis, up more than 20 per cent this year as the United States and China square off. Both sides traded fresh blows last Friday and US President Donald Trump kept up his hard line over the weekend.
The fight is boosting the odds of more rate cuts by the Federal Reserve. As most raw materials fell, precious metals stayed "the standout sector", Australia and New Zealand Banking Group said in a note.
Fed policymakers have made the case that trade disputes are hurting the global economy and making their jobs harder.
US 10-year Treasury yields sank to 1.4409 per cent yesterday, the lowest since 2016. As gold futures rose 1 per cent to US$1,552.60 at 7.38am in London, miners' shares surged.
Investors have also pushed into bullion-backed exchange-traded funds, which are at their highest since 2013.