Gold Rises Above $3,000 for First Time as Investors Seek Safe Haven
TLDR
- Gold prices surged past $3,000 per ounce for the first time on Friday
- This comes amid escalating trade tensions between the United States and the European Union
- The latest rally follows President Donald Trump’s threat to impose 200% tariffs on European alcohol imports
Gold prices surged past $3,000 per ounce for the first time on Friday as investors turned to the safe-haven asset amid escalating trade tensions between the United States and the European Union. Spot gold rose 0.4% to $3,001 per ounce at 6:30 a.m. ET.
The latest rally follows President Donald Trump’s threat to impose 200% tariffs on European alcohol imports, retaliating against the EU’s new tariffs introduced this week. The EU’s move was in response to the US imposing 25% tariffs on steel and aluminum imports that took effect Wednesday.
Gold has gained 15% this year, driven by geopolitical risks, economic slowdown fears, and central bank buying. The World Gold Council recently reported that rising geopolitical uncertainty has fueled gold demand, despite a strong US dollar.
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Key Takeaways
The rally follows strong central bank purchases, particularly from China and Poland, which are expected to continue. In 2023, Poland’s central bank led gold purchases, adding 90 metric tons, while the US remains the world’s largest holder with over 8,000 tons. "Central banks are still buying and will likely continue, given ongoing geopolitical risks and economic uncertainty," wrote ING commodities strategist Ewa Manthey. There are concerns that gold itself could face US tariffs, which could increase price volatility. "If tariffs on gold are applied, it would lead to higher prices and potential shifts in trade routes," Manthey added. In 2024, Mexico accounted for 30% of US gold imports, followed by Canada at 15%. Any trade restrictions could further drive gold’s price momentum.
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