The price of gold – a time-tested safe-haven asset – has hit a series of record highs this year.
Spot gold rose as much as 0.4% to just over $3,001 an ounce at 6:30 a.m. ET.
The new peak comes as investors rush to the store of value to hedge against risk from President Donald Trump’s trade war.
On Thursday, he threatened to impose 200% tariffs on European alcohol imports in retaliation against tariffs the European Union introduced this week.
EU imposed the tariffs after the US imposed 25% tariffs on all steel and aluminum imports that took effect Wednesday.
Gold prices have been on a tear, gaining about 15% this year as investors snap up the haven asset over fears of an economic slowdown.
“Markets are fixated on the fallout of broad tariffs that the Trump administration has levied,” the World Gold Council wrote last month.
Its analysis showed geopolitical risk rose significantly in January, boosting prices of the yellow metal even on the back of a strong dollar – which typically weighs on dollar-denominated gold.
This year’s gold rally comes on the heels of strong central bank gold buying, especially from China, last year. This trend is expected to persist this year, supporting gold prices.
Poland’s central bank bought the most gold last year, snapping up 90 metric tons, according to the World Gold Council. The US holds the most gold, with more than 8,000 tons.
“Central banks are still buying and will probably continue to do so as geopolitical tensions and the economic climate continue to push them to increase their allocation towards safe-haven assets,” wrote Ewa Manthey, a commodities strategist at ING, last month.
There are also concerns that Trump’s broad tariffs could apply to gold, further boosting the precious metal’s price.
“If tariffs on gold are applied, this would lead to higher and more volatile gold prices in the US and a potential reshuffle of trade routes,” wrote Manthey.
In 2024, Mexico accounted for around 30% of US imports of gold, and Canada for around 15%.
