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London (CNN) — Gold prices reached $3,000 an ounce for the first time in history Friday, boosted by demand for safe-haven assets as investors fret about President Donald Trump’s tariffs and geopolitics.
Prices hit a record $3,005 before paring those gains a bit to just under $3,000.
Jason Hollands, managing director at Evelyn Partners, a UK wealth manager, described the yellow metal as “the panic asset of choice” and said the latest rise in prices reflected “the extreme uncertainty facing the global trade system at the moment from the Trump administration’s erratic and aggressive approach to tariffs and corresponding retaliatory measures.”
The surging price of gold is among several signs that investors are concerned about America’s economic outlook, former Treasury Secretary Larry Summers told CNN on Friday.
“It’s a sign of the amount of uncertainty that’s being created that amidst everything else, the asset that’s done well is gold,” Summers told CNN’s Pamela Brown and Wolf Blitzer. “That’s what people do when they don’t have confidence in the people who are managing the country.”
On Wednesday, 25% tariffs on all steel and aluminum imported into the United States became the latest Trump 2.0 duties to come into force, triggering swift countermeasures from Canada and the European Union.
Trump then massively upped the ante Thursday by threatening to slap a 200% tariff on alcoholic beverages from the EU unless it rescinded the 50% tariff imposed on US spirits the day before.
His administration’s trade policy has also been marked by flip-flopping and delays, with the resulting uncertainty paralyzing businesses, which are unsure whether to hire and invest.
It is all adding up to growing worries about a possible economic slowdown globally.
The war in Ukraine is another factor in gold’s reign.
“Russia’s rejection of the US-proposed 30-day ceasefire in Ukraine has reignited geopolitical instability,” said Viktoria Kuszak, a research analyst at Sucden Financial, a trading firm.
On Thursday, Russian President Vladimir Putin questioned the US-brokered proposal, setting forth tough conditions and demanding concessions from Kyiv despite saying he supported a truce in theory.
The drawn-out war has underpinned gold prices over the longer term, too.
Trevor Greetham, a senior investor at Royal London Asset Management, noted that prices were now up about 60% since the 2022 invasion of Ukraine. “Central banks, including the People’s Bank of China, have been adding to their (gold) stockpiles rather than risk having foreign reserves seized, as happened to Russia,” he said.
Yet another tailwind for gold prices is a recent weakening of the dollar, said Hollands at Evelyn Partners. Gold is priced in dollars, so a weaker greenback has made the metal more appealing to buyers outside of the US.
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