By Rahul Paswan
(Reuters) – Gold prices hit a record high on Friday and were set for their best month since March 2024 as investors flocked to the safe-haven metal due to heightened U.S. tariff concerns, while awaiting a key inflation report due later in the day for further direction.
Spot gold steadied at $2,794.61 per ounce, by 0408 GMT, and has gained more than 6% this month. Earlier in the session, prices hit an all-time high of $2,799.71.
U.S. gold futures rose 0.2% to $2,826.90.
Chinese markets were closed for the Lunar New Year holidays.
President Donald Trump said on Thursday that the United States would impose a 25% tariff on imports from Mexico and Canada, repeating his warning to the two countries.
“Repeated tariff threats have fuelled safe-haven flows into gold… any downside surprise in the inflation reading could suggest greater policy flexibility for the Fed, potentially bringing forward rate-cut expectations and providing further support for gold,” IG market strategist Yeap Jun Rong said.
The December U.S. personal consumption expenditures (PCE) report, due at 1330 GMT, will be scanned for further clues on interest rate trajectory. On Wednesday, Fed Chair Jerome Powell said inflation and jobs data would determine when another easing would come.
Meanwhile, analysts at BMI noted strong downside risks to gold in 2025 and anticipate significant volatility, as the Fed is likely to take a more cautious approach to rate cuts.
Gold is considered a safe investment during geopolitical turmoil and thrives in a low interest rate environment.
Amid tariff concerns, gold stocks in COMEX-approved warehouses since late November rose by 73.5% to 30.4 million ounces.
Further gains could be in store for gold if tariff threats move from being a bargaining concept to an economic reality, said Tim Waterer, chief market analyst at KCM Trade, adding that prices could move north of $2,800 level.
Spot silver shed 0.8% to $31.43 per ounce, palladium fell 0.2% to $987.06, and platinum added 0.2% to $968.84.
Silver and platinum were poised for weekly gains.
(Reporting by Rahul Paswan in Bengaluru and additional reporting by Ashitha Shivaprasad; Editing by Subhranshu Sahu)
