Gold Hits Record High as Investors Seek Safety Amid Trade War Fears

Gold (GC=F) surged to a record high as investors flocked to safe havens following renewed threats of tariffs from US President Donald Trump on Mexico and Canada.

Gold briefly crossed $2,800 an ounce for the first time ever on Friday, extending a 1.3% jump from Thursday and surpassing the previous all-time peak set in October. The rally follows Trump's announcement that he will impose 25% levies on imports from Canada and Mexico on Feb. 1. He has also threatened China with tariffs but without specifying a level.

The precious metal, on track for its fifth consecutive weekly gain, has benefited from haven demand as Trump's tariff threats raise concerns about trade wars and potential economic slowdown. There are also worries that his proposed tax cuts and immigration changes could worsen the US fiscal deficit and fuel inflation.

Federal Reserve Chair Jerome Powell said Wednesday that the central bank is in a "wait-and-see" mode regarding the potential impact of the new administration's policies. The Federal Open Market Committee left interest rates unchanged this week as expected, after cutting them at three previous meetings since September.

Traders will be closely watching the personal consumption expenditures index, the Fed's preferred inflation gauge, due for release later Friday. Economists surveyed by Bloomberg expect a slight increase in price hikes.

Spot gold was up 0.1% to $2,796.83 an ounce as of 8:08 a.m. in London. Silver (SI=F) declined slightly, while platinum (PL=F) and palladium (PA=F) remained largely unchanged.