Gold prices have surged to its highest in three years in Korea on Tuesday in line with the jump in international prices on escalating economic uncertainties amid the ongoing trade war between the United States and China.

According to the Korea Exchange on Thursday, the price of gold closed Tuesday at 50,460 won ($42.84) per gram, the highest since the price hit 50,500 won on July 8, 2016 when the Brexit news made traders and investors jittery. Gold prices in the U.S. also hovered around $42.55 per gram on the day.

Monthly trade volume soared to 557-kg in May, marking the largest since August last year.

Demand for gold has been rising recently due to renewed trade tensions between the U.S. and China, according to market analysts, as more and more investors are opting for safer assets for risk aversion.

Expectations for a possible U.S. interest rate cut by the Federal Reserve also encouraged investors to rush to bullion. Fed Chair Jerome Powell on Tuesday moved away from its “patient” approach, saying the central bank is closely monitoring the escalating trade tensions and would respond “as appropriate” if needed.

Some analysts, however, expect the trend will soon be reversed, betting on a U.S.-China trade breakthrough at the G20 summit meeting in Japan later this month.

By Yoo Joon-ho and Lee Ha-yeon

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