Investing.com-- Gold prices hit a record high in Asian trade on Wednesday as safe haven demand for the yellow metal was underpinned by persistent concerns over a brewing trade war between the U.S. and China. 

U.S. President Donald Trump’s comments on the U.S. taking over the Gaza strip and relocating Palestinians from the region also drove haven demand, given that it drew a sharp rebuke from several countries in the region. 

Bullion prices were also aided by weakness in the dollar, which wiped out all of its gains this week after U.S. President Donald Trump postponed trade tariffs on Mexico and Canada.

But Trump offered no such relief to China, keeping traders largely biased towards safe havens. China also retaliated against U.S. trade tariffs on Tuesday. 

Spot gold jumped 0.6% to a record high of $2,858.27 an ounce, while gold futures expiring in April rose 0.4% to $2,885.39 an ounce. 

Gold surges as US-China trade tensions simmer 

Bullion prices benefited from safe haven buying after Trump’s 10% tariffs on China took effect from Tuesday. Beijing retaliated to this with its own import tariffs, export controls, as well some measures against select U.S. companies, such as Google (NASDAQ:GOOGL). 

Trump also signaled that he was in no hurry to talk to Chinese President Xi Jinping, lessening the possibility of a de-escalation in trade tensions. Trump’s tariff relief for Canada and Mexico came only following dialogue with their heads of state. 

A Sino-U.S. trade war stands to potentially disrupt global trade, and is expected to pressure growth in the world’s biggest economies.

Trump’s China tariffs also sparked fears that he will make good on his threats to impose universal trade tariffs, as well as targeted duties on Taiwan and Europe. 

Still, analysts expect any prolonged trade tariffs to push up U.S. inflation and keep interest rates high for longer. Such a scenario could diminish gold’s long-term prospects. 

Other precious metals dipped on Wednesday. Platinum futures fell slightly to $1,011.30 an ounce, while silver futures fell 0.3% to $32.938 an ounce.

Among industrial metals, benchmark copper futures on the London Metal Exchange steadied at $9,193.50 a ton, while March copper futures were flat at $4.3675 a pound. 

Gaza uncertainty increases after Trump comments 

Haven demand was also boosted by Trump proposing a U.S. takeover of the Gaza strip, after proposing that the Palestinians in the region should be resettled. 

Trump said during a White House conference with Israeli Prime Minister Benjamin Netanyahu that the U.S. will “take over” the Gaza Strip, level the site and rebuild it as an economic development. He also repeated his calls to relocate Palestinians from Gaza into neighboring states. 

Trump’s comments- which were scant on details, but could upturn decades of U.S. policy in the Middle East- drew sharp rebukes from Palestinian leaders and Arab countries.

This drove up concerns over renewed geopolitical tensions in the Middle East.