Fears of U.S. growth due to aggressive trade measures and weak inflation statistics caused gold to soar to a record high of $2,990.21 an ounce. As economic worries increased and investors anticipated more rises in the precious metal, they rushed to safer investments.
When investors sought safer assets due to concerns about the outlook for US economy stoked by President Donald Trump’s aggressive trade agenda and a dismal inflation data, gold hit a new high.
Bullion broke previous highs achieved on Thursday and earlier Friday, rising to $2,990.21 an ounce.
The metals most recent milestone follows US statistics indicating that a steep drop in trade margins caused wholesale inflation to stagnate in February. The argument for looser monetary policy,as US officials attempt to curb ongoing price pressures,was reinforced by the print. Since gold doesn’t pay interest, lower borrowing rates tend to increase its value.
Meanwhile, as dwindling hopes for U.S. economic growth weighed on stocks, investors flocked to U.S. government bonds, pushing rates on 10- and 30-year Treasuries to their highest levels this month. After the S&P 500 fell into its first 10% fall in over two years on Thursday,wiping off roughly $5 trillion in market capitalization since a peak in February,gold was helped by lower yields and haven demand.
Trump’s threat to impose a 200% tariff on European wine, champagne, and other alcoholic products on Thursday further damaged sentiment. Additionally,he stated that he would not revoke the steel and aluminum levies that went into effect this week or abandon plans to impose broad reciprocal duties on international trading partners that would begin as early as April 2.
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In addition to other worries,banks are growing more optimistic that Trump disruptive trade plans would spur additional gold gains. This week,BNP Paribas SA increased its projection to show average prices far above $3,000,while Macquarie Group predicted a jump to $3,500 an ounce in the second quarter.
At 9:45 a.m. in Singapore,spot gold was trading at $2,988.09 an ounce,on pace for a 2.7% weekly increase. There was no change in the Bloomberg Dollar Spot Index. After rising more than 5% during the preceding three sessions,silver slightly declined. Palladium and platinum increased.