Driven by risk aversion and growing prospects of rate cuts by the Federal Reserve, gold held above $2,980 per ounce on Friday, setting a new high and setting the stage for a weekly rise of more than 2%.
President Donald Trump of the United States threatened to put a 200% tariff on European wine and other alcoholic drinks in the most recent round of his multifront trade war, after the EU’s 50% levy on American whisky exports.
The Fed has greater leeway to lower interest rates and increase the attraction of non-yielding gold as a result of recent PPI and CPI data that indicated price pressures were abating in February.
The metal is also being supported by robust demand for ETFs and ongoing central bank purchases, with China continuing its purchases in February for the fourth straight month.