Gold prices remained steady near record highs in Asian trading on Friday, as escalating trade tensions and softer U.S. inflation data bolstered demand for the safe-haven asset.
Spot gold held firm at $2,986.62 per ounce as of 01:42 ET (05:42 GMT), after hitting a fresh peak of $2,993.90 earlier in the session. April Gold Futures added 0.2% to $2,999.17 an ounce.
The yellow metal is poised for a 2.5% weekly gain, reflecting heightened economic uncertainty driven by global trade conflicts and shifting Federal Reserve policy expectations.
Trump’s Tariff Threats Drive Safe-Haven Demand
Gold’s bullish momentum comes after President Donald Trump proposed a 200% tariff on European wines and champagnes. This move follows the European Union’s 50% levy on American whiskey, which was itself a response to Trump’s 25% tariff on imported steel and aluminum.
These escalating trade disputes have intensified fears of a U.S. economic downturn, prompting investors to shift toward gold as a hedge against market volatility.
Additionally, U.S. inflation data revealed softer-than-expected figures:
- Consumer Price Index (CPI): Lower than forecasted, signaling weaker inflationary pressures.
- Producer Price Index (PPI): Showed a similar trend, reinforcing expectations of potential Fed rate cuts.
Lower interest rates typically enhance gold’s appeal by reducing the opportunity cost of holding non-yielding assets.
Copper Prices Climb on China Stimulus Hopes
Meanwhile, copper prices remained near a five-month high, supported by China’s economic stimulus plans. The People’s Bank of China (PBoC) announced potential interest rate cuts and currency stabilization measures to spur economic growth.
As a result, industrial metals saw a boost:
- London Metal Exchange Copper Futures: Up 0.6% to $9,813.75 per ton.
- May Copper Futures: Gained 0.4% to $4.9383 per pound.
Platinum and silver also edged higher, reflecting strong investor sentiment across the precious metals sector.