&imwidth=800&imheight=600&format=webp&quality=medium "Gold prices touch a new high. Here's why the precious metal is soaring")
The prices of gold soared recordhigh on Monday amid the new US-China trade tensions after Beijing enacted restrictions on the export of rare earth materials. Spot gold was up 1.5% at $4,067.79 per ounce, as of 0700 GMT, after having hit an all-time high of $4,078.05 earlier in the session.
What are the potential reasons behind the surge in gold prices?
The rallycame days after US President Donald Trump threatened China that he would impose a 100 percent tariff on all imports to the United States. He also announced export controls on critical software by November 1.
Other factors affecting the gold rally are geopolitical uncertainties and a weak dollar.
Spot silver also rose to $51.60/oz after reaching a record high of $51.70.
The prices of the precious metals are also increasing because investors have been anticipating more federal rate cuts in the US.
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US Fed Chair Jerome Powell will address the NABE annual meeting on Tuesday. Investors anticipatecues about the anticipated rate cut of 25 bps in October.
Other preciousmetalslike platinumand palladium also gained.
In India, the prices of 24-karat gold had increased to Rs 12,540 per gram.
Kyle Rodda, analyst at Capital.com, told CNBC that developments in the Middle East had previously eased pressure on the gold market, but renewed trade tensions between the U.S. and China have reignited safe-haven demand.
Heavy sell-offs in global equity markets supported the safe-haven demand for gold.
Analysts saythat the bullish momentum of gold is expected to continue. However, the precious metal prices might witness potential volatility because of geopolitical developments and the actions of central banks.