Gold prices surged to a record high on Friday, as investors flocked to the safe-haven asset amid fears of a global trade war triggered by U.S. President Donald Trump’s latest tariffs.
Spot gold climbed 0.6 per cent to USD 3,074.43 an ounce as of 02:41 p.m. EDT (1839 GMT) after hitting its eighteenth record high this year at USD 3,086.70 earlier in the session. Bullion is up 1.7 per cent this week and is on track for a fourth straight weekly gain.
U.S. gold futures settled 0.8 per cent higher at USD 3,114.30.
“It continues to be the safe-haven demand on ramped-up concerns about tariffs, trade and ongoing geopolitical uncertainty as well,” that is supporting gold, said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Gold, traditionally seen as a hedge against economic and political instability, tends to thrive in a low-interest rate environment.
The Personal Consumption Expenditures (PCE) price index increased 0.4 per cent in February, compared with analysts’ expectation of 0.3 per cent rise, similar to January’s increase.
The data isn’t likely to change rate cut expectations very much, as it is only a little hotter than expected, Grant added.
The Fed has held interest rates steady so far this year after three rate cuts in 2024, but hinted at a potential half-percentage point in rate cuts later in the year.
The market is currently pricing 63 bps of Fed rate cuts by the year-end, starting in July.
Markets are now bracing for Trump’s plans for reciprocal tariffs, which he intends to lay out on April 2.
Trump’s policies are perceived as inflationary, posing a risk to economic growth and escalating trade tensions, analysts say.
Spot silver fell 1.4 per cent to USD 33.93 an ounce, platinum eased 0.7 per cent to USD 979.10, and palladium was down 0.3 per cent to USD 972.13. All three were set for weekly gains.
