Safe-haven gold pierced through the psychological milestone of $3,000 an ounce on Friday for the first time, building on an historic rally fueled by escalating trade tensions and expectations of U.S. interest rate cuts.
Spot gold was up 0.3% at $2,997.75 an ounce at 11:15 a.m. GMT after hitting a record high of $3,004.86. U.S. gold futures were up 0.6% to $3,009.10.
Gold, traditionally viewed as a safe haven investment during times of inflation or economic volatility, has risen over 14% so far this year, driven in part by concerns over the impact of U.S. President Donald Trump’s tariffs and the recent sell-off in stock markets.
“Markets hate uncertainty, and Trump’s second tenure in the White House has served to provide huge instability over expectations for trade, jobs, inflation, and government spending,” said Joshua Mahony, chief market analyst at Scope Markets.
However, Asian equities managed to end the week on a positive note while European markets were also up in midday deals.
The global trade war that has roiled financial markets and raised recession fears is escalating, with Trump on Thursday threatening to slap new sweeping tariffs on imports from Europe.
“Amid escalating geopolitical tensions, rising trade tariffs, and growing financial market uncertainty, investors are increasingly seeking stability – and they are finding it in gold,” said Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany.
“For now, strong physical demand and safe-haven buying suggest that gold’s upward momentum is not yet exhausted.”
In the latest salvo, Trump threatened to impose 200% tariffs on wine, Champagne and other alcoholic beverages from European Union countries in retaliation against the bloc’s planned levies on American-made whiskey and other products.
The EU’s tariffs were announced in retaliation to Trump’s levies on steel and aluminium.
The president said he would not row back on the metals duties, nor plans for sweeping reciprocal tariffs on countries worldwide that are due to kick in as soon as April 2.
A combination of strong central bank purchases, sound investment demand as well as bets on monetary policy easing by the U.S. Federal Reserve (Fed), have also bolstered zero-yield bullion’s performance this year.
The Fed is widely expected to keep its benchmark overnight interest rate unchanged at its meeting on Wednesday.
“Overall we maintain our $3,300 call for the year,” said Ole Hansen, head of commodity strategy at Saxo Bank, adding a close above $3,000 on Friday can signal a continuation of the rally next week.
ANZ in a note forecast gold to hit $3,050 in 2025.
Silver, meanwhile, added 0.2% to $33.87 an ounce, platinum lost 0.7% to $987.30 and palladium gained 0.6% to $963.78.
Stocks
Stocks gained support from “hopes that the U.S. government would avoid a shutdown of nonessential services,” said Derren Nathan, head of equity research at Hargreaves Lansdown.
With just hours until a deadline to push a Republican spending bill through, Senate Democratic leader Chuck Schumer dropped his threat to block it.
The package would keep the lights on through September, but Democrats have come under pressure from their grassroots to defy the plan, which they say is full of harmful spending cuts.
London’s FTSE 100 index rose as the pound dropped against the dollar, after data showed the U.K. economy unexpectedly shrank in January.
In the eurozone, Paris and Frankfurt both rebounded after losses the previous day on U.S. tariff threats.
Observers have warned that markets are being wracked by uncertainty amid fears the increasing trade war between major global economies could reignite inflation.
Wall Street has been hammered, with the S&P 500 slipping into a correction Thursday, having fallen more than 10% from its recent peak – a record high touched just last month.
In Asia, markets benefited from news that Chinese officials would hold a news conference Monday on measures to boost consumption, with Hong Kong rising over 2% and Shanghai jumping 1.8% on Friday.
Tokyo also advanced.
Company news
In company news, shares in Gucci-owner Kering slumped more than 10% in Paris as the group appointed a new creative director to helm its struggling flagship brand.
Shares in BMW dropped over 2% as the German premium carmaker reported a plunge in profits last year and warned of challenges for the year ahead from trade tensions and weak demand in China.
Meanwhile, major conglomerate CK Hutchison Holdings – owned by tycoon Li Ka-shing – tumbled in Hong Kong after Chinese officials in the city reposted a newspaper opinion piece attacking the firm over its sale of a controlling stake in Panama ports under pressure from Trump.
It had surged as much as 25% after the sale last week.
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