The climb in U.S. tensions with China, as well as Russia, “may be encouraging some safe-haven buying” of the metal, said Michael Armbruster, managing partner at Altavest.

Tensions between the U.S. and China over Taiwan have climbed, and the Biden administration on Thursday expelled some Russian diplomats and announced sanctions against dozens of people and companies, partly in retaliation to Russia’s interference in last year’s presidential election.

“The U.S. is talking tough with China and Russia and this may be the first sign that markets are starting to price in a new risk,” Armbruster told MarketWatch. “So far, equity markets are oblivious.”

June gold  GC00, +1.85% GCM21, +1.85% rose $30.50, or 1.8%, to settle at $1,766.80 an ounce. That was the highest settlement for a most-active contract since Feb. 25 and largest one-day dollar and percentage increase March 9, FactSet data show.

A closely followed report on U.S. retail sales showed a 9.8% rise in March thanks to $1,400 stimulus checks from the government to consumers, reflecting accelerating economic growth in the aftermath of the COVID pandemic.

“The US retail sales number have strengthened the optimism among traders,” wrote Naeem Aslam, chief market analyst at AvaTrade, in a note.

“In terms of gold price, we have seen more momentum coming as the dollar index loses its strength further because the Fed Chair already informed markets that rates aren’t going higher anytime soon,” he said.

The dollar was steady in Thursday dealings, at 91.69 after tapping a low at 91.49, as gauged by the ICE U.S. Dollar Index DXY, -0.04%, a measure of the buck against a half-dozen currencies. A weaker dollar can make dollar-pegged assets more appealing to overseas buyers.

Bond yields were pulling back, with the 10-year Treasury BX:TMUBMUSD10Y trading at 1.54%. A fall in government debt yields can boost appetite for precious metals.

Prices for gold had moved up overnight in the reaction to the Fed’s Beige Book release Wednesday afternoon. The report showed increased economic activity and moderate wage and price increases in most Federal Reserve districts, “potentially increasing inflation concerns and adding to price pressures already seen in greater-than-expected increases” in the producer and consumer price indexes, said Jeff Klearman, portfolio manager at GraniteShares, which offers the GraniteShares Gold Trust BAR.

Gold prices, which have been range bound, “continue to be supported by the Fed’s historically unprecedented accommodative monetary policy, negative real rates, a weaker U.S. dollar and growing inflation concerns,” Klearman told MarketWatch shortly after the Beige Book’s release.

Meanwhile, among other metals traded on Comex Wednesday, May silver  SIK21, +1.86% SI00, +1.86% climbed 1.7% to trade $25.96 an ounce and May copper HGK21, +2.36% added 2.2% to $4.22 a pound — the highest finish since March 2. Industrial metals got a lift from upbeat economic data.

July platinum PLN21, +2.15% climbed by 1.9% to $1,200.20 an ounce and June palladium PAM21, +2.58% settled at $2,739.40 an ounce, up 2.2%.

In other economic data, U.S. industrial production rose 1.4% in March and U.S. weekly jobless benefit claims fell by 193,000 to 576,000 in the week of April 10, falling well below economists’ expectations.