The price of an ounce of gold has passed the $3,000 milestone for the first time, buoyed by its safe haven appeal amid uncertainty surrounding the effects of the US trade war and widespread concern about the health of the global economy.
The precious metal, considered a hedge against inflation and other economic headwinds, hit a high of $3,004.86 an ounce at midday trading on Friday. It was trading at $2,998.28 at 4.43pm UAE time.
Gold has now risen by nearly 11 per cent since the January inauguration of US President Donald Trump and more than 13 per cent year-to-date. It passed the key $2,000 and $2,500 levels in May 2023 and August 2024, respectively.
"Gold remains a popular hedge for investors seeking refuge from the agitated international waters," said Ipek Ozkardeskaya, s senior analyst at Swissquote Bank.
Gold set several records last year, bolstered by the Fed's rate-cutting cycle, safe-haven demand and robust central bank buying.
Its most recent major surge came towards the end of January when Mr Trump, before his inauguration, said he would fulfil his election promise to impose a 25 per cent tariff on imports from Mexico and Canada, while also threatening to do the same for goods from China.
He did eventually follow through, sparking retaliatory tariffs from the three countries, which are America's biggest trading partners.
The trade war has spurred fears of a vicious circle that could sap economic growth. There are also worries that Mr Trump's pledges to cut taxes and overhaul immigration may erode US finances and reignite inflation, spurring investors to turn to safer assets such as gold.
Investors continue to closely monitor the evolving tariff situation and its potential impact on the US economy and Federal Reserve policy decisions. Data being eyed includes Thursday's jobless claims and Friday's non-farm payrolls data.
It has been observed that record volumes of gold have been moved to New York warehouses in recent months due to these uncertainties, said Vijay Valecha, chief investment officer of Dubai-based Century Financial.
They "could provide signs on the future of rate cuts by the Fed", he added.
Safe-haven assets, including gold and high-quality bonds, will probably see increased interest, as "investors can’t afford complacency", said Nigel Green, chief executive of wealth management company deVere Group.
"Now is the time to reassess portfolios, hedge against volatility, and take advantage of shifting market dynamics," he added.
