Gold prices soar to all-time high over trade war concerns

By Anmol Choubey, Reuters

March 28 (Reuters) - Gold prices surged to a record high on Friday, as investors flocked to the safe-haven asset amid fears of a global trade war triggered by U.S. President Donald Trump's latest tariffs.

Spot gold climbed 0.6% to $3,074.43 an ounce as of 02:41 p.m. EDT (1839 GMT) after hitting its eighteenth record high this year at $3,086.70 earlier in the session. Bullion is up 1.7% this week and is on track for a fourth straight weekly gain.

The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here.

U.S. gold futures settled 0.8% higher at $3,114.30.

"It continues to be the safe-haven demand on ramped-up concerns about tariffs, trade and ongoing geopolitical uncertainty as well," that is supporting gold, said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Gold, traditionally seen as a hedge against economic and political instability, tends to thrive in a low-interest rate environment.

The Personal Consumption Expenditures (PCE) price index increased 0.4% in February, compared with analysts' expectation of 0.3% rise, similar to January's increase.

The data isn't likely to change rate cut expectations very much, as it is only a little hotter than expected, Grant added.

The Fed has held interest rates steady so far this year after three rate cuts in 2024, but hinted at a potential half-percentage point in rate cuts later in the year.

The market is currently pricing 63 bps of Fed rate cuts by the year-end, starting in July. Markets are now bracing for Trump's plans for reciprocal tariffs, which he intends to lay out on April 2.

Trump's policies are perceived as inflationary, posing a risk to economic growth and escalating trade tensions, analysts say.

Spot silver fell 1.4% to $33.93 an ounce, platinum eased 0.7% to $979.10, and palladium was down 0.3% to $972.13. All three were set for weekly gains.