Investing.com-- Gold prices rose to an all-time high Friday, breaking though the key $3,000 per ounce level with the safe haven supported by President Donald Trump’s fresh tariff threats, while soft U.S. inflation prints further aided sentiment.
At 08:30 ET (12:30 GMT), Spot Gold was up 0.6% at $3,009.11 per ounce, after reaching a fresh record high of $3,017.11 earlier in the session. Gold Futures expiring in April gained 0.3% to $2,998.78 an ounce.
Both were set to gain over 3% this week, as escalating trade tensions and economic indicators bolstered the metal’s appeal as a safe-haven asset.
"Gold has finally done it," said David Morrison, Senior Market Analyst at Trade Nation. "It pushed over $3,000 per ounce in this morning’s European session, marking a significant milestone in the rally which began in December 2015. It first broke above $2,000 in August 2020. But it subsequently pulled back, and only made a decisive break above $2,000 in February last year. Since then it hasn’t looked back."
But the big question is: what now?
"At the time of writing, gold had dropped back below $3,000, indicating that traders are treating this level as an area to take profits and/or go short, rather than as a marker for buy-stops and taking on fresh long positions. But it seem likely that most short-sellers will have their stops placed a bit above the big figure. In addition, it takes time for traders to get comfortable trading in uncharted territory. It will be very interesting to see how gold behaves going into the weekend. It’s worth noting that it is far from being overbought at current levels," Morrison added.
Trump’s fresh tariff threats boost gold’s safe-haven appeal
President Donald Trump threatened 200% tariffs on European alcoholic beverages, including wines and champagnes, in retaliation to the European Union’s decision to impose a 50% levy on American whiskey.
The EU’s move was a response to Trump’s recent 25% tariffs on imported steel and aluminum.
These escalating trade measures have heightened concerns about a potential U.S. recession, prompting investors to seek refuge in gold.
Concurrently, recent U.S. economic data revealed softer inflation figures. Both the consumer price index (CPI) and producer price index (PPI) indicated weaker-than-expected inflationary pressures, reinforcing expectations of potential interest rate cuts by the Federal Reserve later this year.
Lower interest rates typically reduce the opportunity cost of holding non-yielding assets like gold, thereby enhancing its attractiveness.
The Federal Reserve is scheduled to meet on March 18-19 to deliberate on interest rate policy. The current consensus anticipates that rates will remain unchanged due to persistent inflation and ongoing trade disputes.
Other precious metals edged higher. Platinum Futures rose 0.9% to $1,015.00 an ounce, while Silver Futures gained 1.3% to $34.755 an ounce.
Copper prices jump on China stimulus, hover near 5-mth high
Copper prices rose on Friday, remaining near their five-month high reached earlier this week.
The People’s Bank of China (PBoC) announced plans on Thursday to introduce additional monetary tools, including potential interest rate cuts and yuan stabilization, to support economic growth.
These measures are expected to boost industrial activity and infrastructure development, driving higher copper demand and prices.
Benchmark Copper Futures on the London Metal Exchange rose 0.6% to $9,807.10 a ton, while Copper Futures expiring in May gained 0.1% to $4.9280 a pound.
(Ayushman Ojha contributed to this article.)