Gold climbed to a record high as concerns about an escalating trade war remained a priority for investors after President Donald Trump imposed U.S. tariffs on all auto imports.
Gold rose as much as 0.7% on Friday to an all-time high of more than US$3,077 an ounce, surpassing the previous record set on Thursday. It was on track for a fourth weekly rise, with prices supported by growing safe-haven demand.
On Thursday, Trump signed a proclamation to implement a 25% tariff on auto imports and promised harsher punishment for the EU and Canada if they join forces to "cause economic harm" to the U.S. Markets are also bracing for a new wave of trade levies on April 2, as the White House prepares to implement so-called reciprocal tariffs. The exact scope of the plans is still unclear.
Growing fears about the potential repercussions of an escalating trade war overshadowed data showing that the U.S. economy expanded at a faster pace in the fourth quarter than previously estimated. A measure of inflation was revised downward.
Gold has risen about 16% this year, in a streak that has seen it hit at least 15 all-time highs. The rally has been driven by central bank buying and investor demand for safe-haven assets amid growing geopolitical and macroeconomic uncertainty.
These factors have helped support prices even as swap traders have reduced their bets on Fed easing this year to two quarter-point rate cuts. Lower rates tend to benefit nonyielding bullion.
Several major banks have raised their price targets for the precious metal, with Goldman Sachs Group Inc (GS) this week raising its forecast to US$3,300 an ounce by the end of the year. The bank cited higher-than-expected central bank demand and strong inflows into bullion-backed exchange-traded funds.
Elsewhere, silver neared its highest since 2012. Like gold, the precious white metal has benefited from rising safe-haven demand, although its market has been particularly tight as fears over potential tariffs have driven large quantities out of London into U.S. vaults.
High London lease rates could push spot prices higher, Standard Chartered Plc analyst Suki Cooper said in a note this week.
Elsewhere, silver neared its highest since 2012. Like gold, the precious white metal has benefited from rising safe-haven demand, although its market has been especially tight as fears over potential tariffs have driven large quantities out of London into vaults in the U.S. Elevated lease rates in London could push spot prices higher, Standard Chartered Plc analyst Suki Cooper said in a note this week.
Spot gold was trading 0.6% higher at US$3,076.92 an ounce at 10:27 a.m. in Singapore, on track for a weekly gain of 1.8%. The Bloomberg Dollar Spot Index was flat. Silver was unchanged, while platinum and palladium rose slightly.
This article was updated on Friday, March 28, 2025 at 12: 53a.m. ET. Previous title: "Goldman raises gold forecast to US$3,300 an ounce by year-end."
Sybilla Gross, Bloomberg