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Gold reaches record levels as tariffs threaten to raise the price of gold.

Gold reaches record levels as tariffs threaten to raise the price of gold.

Asia shares rose Friday, and global markets tried to rebound after a brutal sale earlier in the week. Gold reached a new record as investors became nervous due to the latest escalation in global trade tensions.

After Senator Chuck Schumer announced that he would vote for a Republican funding bill to avoid a government shutdown, he signaled his party's support.

U.S. Stock Futures were a strong response. Nasdaq futures gained more than 1% in one instance and S&P futures advanced by 0.6%.

FTSE Futures also gained 0.3%. DAX futures rose 0.6%.

Alvin Tan is the head of Asia FX Strategy at RBC Capital Markets. He said that this news, for today at least, was positive for the market sentiment.

The broadest MSCI index of Asia-Pacific stocks outside Japan, which includes Japan, traded 0.95% higher. However, it is still on course to lose 1.5% this week as global trade conflicts have weakened global stock markets.

Donald Trump, the U.S. president, said that he will impose a 200% tariff on imports of European wines and spirits if the EU does not remove the retaliatory charges on American whiskeys and other products which come into effect in the next month.

Vishnu Varathan is the head of Asia ex-Japan macro research at Mizuho.

Recent developments have sparked the steep sell-offs on Wall Street, and confirmed that the S&P 500 is in a correction. This comes just one week after Nasdaq also confirmed this.

"I don't think Trump 2.0 is the same as Trump 1.0. Michael Strobaek is the global chief investment officer of Lombard Odier. He said that this time the president appears to be willing to let U.S. stocks and the economy suffer as he implements his "America first" goals.

Gold, a safe-haven asset, has benefited from the trade war. The yellow metal hit a record of $2,993.80 per ounce last Friday. The yellow metal was expected to rise 2.6% this week.

Japan's Nikkei gained 0.8%.

Chinese stocks rose on Friday after Hohhot, a northern Chinese city, announced large cash rewards for boosting birth rates.

Investors also anticipated a press conference by officials of Beijing's top planning office and other agencies next week to discuss additional measures for boosting domestic consumption.

The Hang Seng Index in Hong Kong jumped by 2.4% while China's blue-chip index, the CSI300, grew by 2.3%. Shanghai Composite Index rose by 1.7%.

Dollar Trouble The dollar gained some ground on Friday thanks to the safe-haven flows. However, it was still not far from recent lows due to fears of an imminent U.S. economic recession and growing trade tensions.

The Euro last traded at $1.08465, down 0.04%, while the Pound fell 0.03% to $1.9475.

The German fiscal reset plan, which includes a 500-billion-euro fund for infrastructure as well as sweeping changes in borrowing rules and growth boosters to boost military spending and revive Europe's biggest economy has given the euro additional support.

The German lower house, which is leaving office in March, will vote on these measures before forming a new Parliament on March 25,

Investors will be waiting for further information on the rate outlook, amid the uncertainty surrounding Trump's policies on trade and the impact they have on U.S. inflation and growth.

"Our assessment shows that the rate trend is constant, and will continue to be lower." Varathan from Mizuho said that it's a matter of timing.

"I believe that the tariffs are only going to be an inconvenience and not a hindrance to the Fed's cuts because, even if prices increase, it will still result in a negative shock of demand, which makes people worse off.

Dollar was up by 0.5% last week against the yen, at 148.50. However, it was expected to suffer a small loss for the week against the Japanese currency due to the increasing bets on more Bank of Japan rate hikes. Next week, the BOJ will also meet.

Oil prices rose after falling the previous session.

Brent futures increased by 0.67%, to $70.35 per barrel. U.S. West Texas Intermediate Crude Futures rose 0.75% per barrel to $67.05.

(source: Reuters)