(Reuters) – Gold prices extended gains on Wednesday, following a record high in the previous session, as investors sought safe-haven metals for support in anticipation of the potential impact of reciprocal U.S. tariffs.
Spot gold rose 0.7% to $3,131.25 an ounce by 02:40 GMT. On Tuesday, gold hit a record high of $3,148.88.
U.S. gold futures rose 0.4% to $3,159.90.
“The record high in gold is largely driven by safe-haven buying, and the geopolitical uncertainty underpinning the trend shows no signs of abating,” said Philip Newman, managing director at Metals Focus.
A slowing U.S. economy, a possible rise in inflation and interest rate cuts could set the stage for gold to reach $3,300 in the coming months, Newman said.
Markets were on edge ahead of the U.S. tariffs, which are set to take effect later today, with U.S. President Donald Trump calling it “liberation day.”
Trump’s tariffs could stoke inflation, slow economic growth and escalate trade disputes.
Gold has thrived as a hedge against global instability and inflation in a low-interest rate environment.
The White House confirmed the new tariffs but gave no specific details on their size and scope.
Gold’s gains were also driven by strong demand from central banks, expectations of an easing of interest rates by the Federal Reserve, geopolitical instability in the Middle East and Europe, and rising inflows into gold-backed exchange-traded funds.
“In a bull case, the market could test $3,400 an ounce in the next nine months,” said Aakash Doshi, global head of gold strategy at State Street Global Advisors.
Fed officials are concerned about a potential slide in employment, but the threat of inflation from tariffs limits their ability to take any action.
The market is awaiting the ADP employment report later today and the nonfarm payrolls report on Friday.
Spot silver rose 0.2% to $33.82 an ounce, platinum gained 0.8% to $987.66 an ounce and palladium rose 0.7% to $990.45 an ounce.
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