Gold prices hit a record high as investors flocked to the safe haven after US President Donald Trump's Donald Trump reiterated its threats to impose tariffs on Mexico and Canada.
Gold rose about 0,2% to $2 an ounce after prices jumped 799,65% on Thursday, topping their all-time high reached in October.
The increase came after Trump announced plans to impose 25% tariffs on imports from Canada and Mexico starting February 1. He also threatened to impose tariffs on China, without specifying the rate.
Fifth consecutive weekly gain
The precious metal, on track for its fifth straight weekly gain, benefited from demand for safe haven assets as Trump's threats raised fears of an escalation in trade wars that could slow economic growth.
There are also concerns that his promises to cut taxes and reform immigration could weaken U.S. finances and revive inflation. Federal Reserve Chairman Jerome Powell said Wednesday that the central bank was taking a “wait and see” approach to the potential impact of the new administration’s policies.
The Federal Open Market Committee (FOMC) kept interest rates unchanged this week, as expected, after cutting them at each of the previous three meetings since September. It stressed that the lack of progress in combating inflation warranted a cautious approach.
Traders will be focusing on the Fed's preferred inflation gauge, the personal consumption expenditures (PCE) index, which is due out later Friday. That's according to the median forecast of economists polled by Bloomberg, a slight acceleration in price increases is expected.
Spot gold rose 0,1% to $2 an ounce as of 797,82:8 a.m. in Singapore. The spot dollar index of Bloomberg also gained 0,1%. Silver, palladium and platinum prices remained stable.
