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Gold reaches all-time high, flirts with $3,000 mark

Gold reaches all-time high, flirts with $3,000 mark

Gold, the safe-haven, surged to an all-time high on Friday. It traded close to the $3,000 key mark, propelled largely by trade war concerns and the expectation of a rate reduction by the U.S. Federal Reserve.

As of 0847 GMT, spot gold remained flat at $2.990.54 per ounce. Safe-haven gold reached a new record of $2,993.80 earlier in the session.

U.S. Gold Futures increased 0.4% to $3.004.20.

This year, bullion has reached 13 new highs and is expected to continue its upward trend for the second consecutive week.

Nitesh Sha, commodities strategist for WisdomTree, said: "Risk is more on the upside as sentiment towards gold has been strong in recent months and may continue if these chaotic policy decisions continue."

The tariffs imposed by U.S. president Donald Trump have had a major impact on the demand for gold. Trump's threat to impose a tariff of 200% on European alcohol imports is part of the global trade war which has caused financial markets to be roiled and recession fears to rise.

Ole Hansen is the head of commodity strategy for Saxo Bank. He said that "momentum, and haven demand, driving an increase in ETF holdings" has also supported gold bullion.

SPDR Gold Trust (the world's biggest gold-backed ETF) reported its holdings at 905,81 metric tonnes after reaching its highest level in August 2023 late February.

Data on Wednesday revealed that consumer prices have cooled more than expected, which suggests the Fed may cut interest rates this year. The Fed will meet again on Wednesday. It is widely expected that the Fed will keep its overnight benchmark interest rate unchanged.

Investors anticipate that policymakers will continue to reduce borrowing costs in June.

Analysts at ANZ stated that they "maintain our bullish stance" on gold. They expect prices to reach a new record high of $3.050 an ounce by 2025.

Spot silver increased 0.5%, to $33.96 per ounce. Platinum fell 0.2%, to $992.15. Palladium rose 1% to $967.42.

(source: Reuters)