Gold prices climbed to a record high on Friday as fears over escalating trade tensions grew following U.S. President Donald Trump’s latest tariff measures. The precious metal was on track for its fourth consecutive week of gains, benefiting from increased safe-haven demand.
"Gold has always been a core long-term investment for wealth preservation and as a hedge against uncertainty in other asset classes," said Ole Hansen, head of commodity strategy at Saxo Bank. He noted that demand remains strong, supported by central bank purchases—particularly in Asia—and renewed institutional interest in bullion-backed exchange-traded funds (ETFs).
Trump's new reciprocal tariffs, set to take effect on April 2, have heightened concerns about inflation and potential economic slowdown. Analysts warn that these trade measures could exacerbate global trade tensions, impacting market stability. Investors are closely watching the upcoming U.S. Personal Consumption Expenditures (PCE) data, set for release at 12:30 GMT, for clues about the Federal Reserve’s future policy direction. Last week, the Fed kept interest rates unchanged but hinted at potential rate cuts later this year. Historically, gold performs well in a low-interest-rate environment, as it does not offer any yield but benefits from investor demand during periods of economic uncertainty.
Beyond financial markets, geopolitical tensions remain in focus. Russian President Vladimir Putin suggested that Ukraine be placed under a temporary administration to facilitate new elections and secure agreements for a possible resolution to the ongoing war. The situation continues to add to market volatility, further reinforcing gold’s appeal as a safe-haven asset.