Gold nears $3,000 as trade tensions and fed expectations drive rally.

Gold surged to a record high on Friday as escalating U.S. trade tensions and expectations of Federal Reserve monetary easing fueled demand for the safe-haven asset.

Spot gold eased slightly by 0.1% to $2,983.78 an ounce as of 0132 GMT, after reaching an all-time high of $2,990.09 earlier in the session—just shy of the key $3,000 milestone. The metal is on track for a second consecutive weekly gain, up 2.5% so far. U.S. gold futures rose 0.2% to $2,996.70.

“The risk-off sentiment in markets suggests investors expect trade tensions to worsen before they improve, leading them to seek gold as a hedge against portfolio volatility,” said IG market strategist Yeap Jun Rong.

The latest escalation in U.S. President Donald Trump’s trade policies saw the European Union retaliate against American tariffs on steel and aluminum with a 50% tax on U.S. whiskey exports. In response, Trump threatened to impose a 200% tariff on European wine and spirits.

“With the psychological $3,000 level in sight, and reciprocal tariffs likely to drive another wave of market turmoil, gold remains a compelling safe-haven asset,” Rong added.

The prospect of heightened trade conflicts and inflationary pressures has driven gold to multiple record highs in 2025. The metal is widely regarded as a hedge against political risks and rising inflation.

Fed Meeting and Market Reactions

Investors now await the Federal Reserve’s policy meeting next Wednesday, where the central bank is expected to maintain interest rates in the 4.25%-4.50% range. Lower interest rates tend to boost gold’s appeal, as the metal does not yield interest.

On Wall Street, major indexes ended sharply lower on Thursday, with the Dow dropping 1.3%, reflecting investor caution amid economic uncertainty.

Meanwhile, Russian President Vladimir Putin stated that Moscow supports a U.S.-proposed ceasefire in Ukraine but seeks clarifications that could delay an agreement.

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