Gold tops $3,000 for first time as Trump turbocharges record rally

An employee takes granules of 99.99 percent pure gold in a workroom at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia

Gold soared above $3,000 for the first time ever on Friday, as investors flocked to the asset, seen as a safe-haven, amid uncertainty over the fallout of US tariffs.

In morning deals, gold rose 2.94 percent to $3,000.85 per ounce, a day after it surpassed its late February record. Spot gold was up 0.4% at $3,000.87 an ounce at 1015 GMT. U.S. gold futures were up 0.7% to $3,013.60.

Bullion has scaled 13 all-time highs so far this year and is on track for a second straight week of gains.

"The precious metal still has an abundance of reasons to pursue higher prices, including geopolitical and economic concerns, along with the prospects of Fed rate cuts," said Han Tan, Exinity Group's chief market analyst told to Reuters.

“Gold is an asset that is able to preserve value under the biggest variety of macroeconomic dislocations that we have seen,” said Thomas Kertsos, co-portfolio manager at First Eagle Investment Management LLC told to Bloomberg News. “We’ve seen that over centuries gold has been able to — despite the volatility — always mean-revert and always maintain its purchasing power, all while providing significant liquidity.”

Gold’s recent rally has come despite what would typically be headwinds: higher interest rates and a strong US dollar. When bonds or cash in the bank give a solid return, gold, which doesn’t generate interest, becomes less appealing. The US dollar is the main currency in which gold is bought and sold. When it becomes more expensive to holders of other currencies, that typically leads to selling pressure on the metal.

U.S. President Donald Trump's tariffs have played a significant role in raising gold's demand. The global trade war that has roiled financial markets and raised recession fears is escalating, with Trump on Thursday threatening to slap a 200% tariff on alcohol imports from Europe.

SPDR Gold Trust, the world's largest gold-backed ETF, said its holdings were at 905.81 metric tons after reaching its highest level since August 2023 in late February.

Meanwhile, data on Wednesday showed U.S. consumer prices cooling more than analysts' expected, potentially creating more room for Federal Reserve rate cuts. The Fed's next meeting is on Wednesday, where it is widely expected to keep its benchmark overnight interest rate unchanged.

"Next week’s FOMC decision, along with Chair (Jerome) Powell’s signals, are set to dictate whether spot gold remains above or below $3k," said Tan.

Traders expect policymakers will resume cutting borrowing costs in June.

"We maintain our bullish stance on gold, with prices expected to reach a record high of $3,050 per ounce in 2025," analysts at ANZ noted.

Spot silver added 0.4% to $33.94 an ounce, platinum lost 0.5% to $989.04 and palladium gained 0.3% to $960.71.