Staff Reporter
Gold prices soared to a record high as investor concerns over an escalating trade war intensified, following President Donald Trump’s decision to implement tariffs on all auto imports.
On Friday, bullion surged by as much as 0.7%, reaching an all-time peak of over $3,077 an ounce, surpassing the previous record set just a day earlier. This marks the fourth consecutive week of gains for gold, driven by increasing demand for safe-haven assets.
Fears surrounding the potential fallout from the growing trade conflict overshadowed positive economic data, which indicated that the U.S. economy expanded more rapidly in the fourth quarter than previously estimated. A measure of inflation was also revised downward.
So far this year, gold prices have risen approximately 16%, achieving at least 15 record highs. This rally has been fueled by central bank purchases and heightened investor interest in safe-haven assets amid rising geopolitical and macroeconomic uncertainties.
These factors have supported gold prices, even as traders have reduced expectations for Federal Reserve rate cuts this year to just two quarter-point reductions. Typically, lower interest rates boost the appeal of non-yielding bullion.
Several major banks have adjusted their price forecasts for gold, with Goldman Sachs Group Inc. increasing its year-end target to $3,300 an ounce this week. The bank cited stronger-than-expected demand from central banks and significant inflows into gold-backed exchange-traded funds.
In related news, silver prices are nearing their highest levels since 2012. Similar to gold, silver has benefitted from rising safe-haven demand, but its market has been particularly tight due to fears of potential tariffs, which have led to significant quantities being drawn from London into U.S. vaults. Standard Chartered Plc analyst Suki Cooper noted that elevated lease rates in London could push spot prices higher.
As of 10:27 a.m. in Singapore, spot gold was trading 0.6% higher at $3,076.92 an ounce, on track for a weekly gain of 1.8%. The Bloomberg Dollar Spot Index remained steady, while silver prices were flat, and platinum and palladium saw slight increases.
