Gold reached a record high amid fears of a trade war

Gold rose in price to a record high, amid fears that the expanding trade war remained at the forefront for investors after US President Donald Trump moved forward with the introduction of tariffs on all car imports, writes UNN with reference to Bloomberg.

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On Friday, gold rose 0.7% to an all-time high of more than $3,077 an ounce, breaking the previous record set on Thursday. It was on track for its fourth consecutive weekly gain, with prices supported by rising demand for safe haven assets.

On Thursday, Trump signed a proclamation imposing a 25% tariff on car imports and promised tougher punishment for the EU and Canada if they joined forces to "cause economic damage" to the US. Markets are also bracing for a new wave of trade tariffs on April 2, as the White House prepares to impose so-called reciprocal tariffs. The exact scope of the plans is not yet clear.

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Growing concerns about the potential consequences of escalating trade wars overshadowed data showing that the US economy grew at a faster pace in the fourth quarter than previously forecast. The inflation figure was revised downwards.

Gold has risen about 16% this year, during which it has reached at least 15 record highs. The growth was driven by central bank purchases and investor demand for safe-haven assets amid growing geopolitical and macroeconomic uncertainty. These drivers have helped support prices, despite swap traders cutting bets on easing by the US Federal Reserve this year to two quarter-point rate cuts. Lower rates tend to benefit non-yielding bullion.

Several major banks have raised their target prices for the precious metal, with Goldman Sachs Group Inc. this week raising its forecast to $3,300 an ounce by year-end. The bank pointed to higher-than-expected demand from central banks and strong inflows into bullion-backed exchange-traded funds.

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Silver was close to its highest level since 2012. Like gold, the white precious metal has benefited from rising demand for safe haven assets, although its market has been particularly tight as concerns about potential tariffs have pulled huge volumes from London to US vaults. Higher lending rates in London could lead to higher spot prices, Standard Chartered Plc analyst Suki Cooper said in a note this week.

Spot gold traded 0.6% higher to $3,076.92 an ounce as of 10:27 a.m. in Singapore, on track for a weekly gain of 1.8%. The Bloomberg Spot Dollar Index remained stable. Silver remained unchanged, while platinum and palladium rose slightly.