Gold surged to a record high above $3,000 per troy ounce, as fears over the threat to global growth from Donald Trump’s trade war push investors into the safe haven metal.
The price of bullion rose to $3,004 per troy ounce in early trading on Friday. Gold has been the among the world’s best-performing assets since Trump took office in January, and has risen 14 per cent since the start of the year.
The US president’s fast-changing tariff policies have sparked concerns that a global trade war will fuel inflation and cause an economic slowdown in the US and beyond, causing Wall Street stocks to fall into a correction and adding to gold’s appeal.
Expectations of interest rate cuts by the US Federal Reserve have also buoyed bullion, which as a non-yielding asset typically benefits from lower borrowing costs.
“Both institutional and private investors are turning to gold to hedge their portfolios against economic turbulence,” said Alexander Zumpfe, senior precious metals trader at Heraeus.
“The physical gold market is experiencing strong demand, especially in Germany, where precious metals have long been valued as protection against economic crises,” he added.
Concerns that Trump might place tariffs on bullion have driven an unprecedented surge of gold bars into New York, where stockpiles on the Comex have reached record levels.
Since Trump was elected, more than $70bn of gold has been flown into New York, although that flow has recently started to slow.
The unexpected surge in gold prices this year has sent investment banks racing to revise their price forecasts. At least four banks — Citibank, Goldman Sachs, Macquarie and RBC — have raised their price forecasts in recent weeks.
