Gold prices hit an all-time high of $3,002.64 on Friday amid growing uncertainty over U.S. tariffs, trade tensions and increasing expectations of monetary policy easing by the Federal Reserve.
In the UAE, gold rates recorded an increase, with 24-carat gold and 22-carat gold gaining AED1 to AED360 and AED335, respectively. Meanwhile, 21-carat gold rose AED1 to AED321.25 and 18-carat gold gained AED0.75 to AED275.25.
Globally, spot gold rose 0.77 percent to $3,002.64 per ounce, as of 10:32 GMT. Bullion is now on track for a second consecutive weekly increase, rising 2.5 percent so far this week.
Meanwhile, U.S. gold futures gained 0.74 percent to $3,013.30.
Trade tensions raise gold’s safe-haven appeal
Investors are seeking gold as a safe haven asset amid rising trade tensions with experts noting that current market volatility will likely get worse before cooling.
In the latest developments regarding U.S. President Donald Trump’s multi-front trade war, the European Union retaliated to U.S. tariffs on steel and aluminum by imposing a 50 percent tax on American whiskey exports. In response, the president threatened on social media platform Truth Social to impose a 200 percent tariff on European wine and spirit imports.
Trump’s tariffs are expected to fuel inflation and economic uncertainty and have prompted gold prices to reach multiple record highs this year. Rising trade tensions and reciprocal tariffs could trigger another wave of market turbulence. Therefore, gold remains a compelling safe-haven asset in an environment where alternatives are scarce.
Some U.S. officials have not raised concerns regarding Wall Street’s reaction to the Trump administration’s trade policies. U.S. Treasury Secretary Scott Bessent said that his comments last Friday about a “detox period” did not mean a recession was necessary. In contrast, U.S. Commerce Secretary Howard Lutnick said a recession would be “worth it” to implement the current administration’s policies.
Fed to hold interest rates
Investors now await the Fed’s monetary policy meeting, scheduled for Wednesday. The central bank is expected to keep its benchmark overnight interest rate in the 4.25-4.50 percent range. Non-yielding gold’s appeal grows in a low-interest-rate environment.
Earlier, the U.S. Bureau of Labor Statistics (BLS) revealed that producer inflation was largely unchanged, seeing only a slight decline. The U.S. Producer Price Index for February came in softer than expected, rising 3.2 percent annually, down from 3.7 percent in January.
At the same time, the number of Americans filing for unemployment benefits last week dipped. Initial Jobless Claims for the week ending March 8 edged down to 220,000, beating forecasts of 225,000 and improving from the 222,000 reported previously.
Elsewhere, Russian President Vladimir Putin said on Thursday that his country supported a U.S. proposal for a ceasefire in Ukraine in principle, but sought a number of clarifications and conditions that will likely extend the war further.
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Other precious metals
As gold prices hit a new high, the precious metals market saw mixed movement on Friday. Spot silver gained 0.02 percent to $33.81 while platinum fell 0.03 percent to $993.95. However, palladium surged 0.76 percent to $965.17.
