REUTERS

Gold prices climbed back towards last week’s record high on Thursday after US President Donald Trump announced new tariffs on auto imports starting next week, escalating global trade tensions that have been driving safe-haven demand for gold.

Spot gold had jumped more than 1 percent to $3,052.97 an ounce as of 1030 GMT, just a few dollars away from the all-time high of $3,057.21 hit on March 20. US gold futures climbed 1.3 percent to $3,060.90.

Gold, traditionally seen as a hedge against uncertainty and inflation, has risen more than 15 percent this year.

“Policymaking coming from the US is driving huge amounts of uncertainty and gold, being the defensive, anti-fragile asset, is largely going up because of those uncertainties,” Nitesh Shah, commodities strategist at WisdomTree, said.

Trump on Wednesday unveiled a 25 percent tariff on imported cars and light trucks, set to come into effect the day after he plans to announce reciprocal tariffs aimed at the countries responsible for the bulk of the US trade deficit.

Traders are now looking to Friday’s US personal consumption expenditures data, the Federal Reserve’s preferred inflation measure, to shed more light on the US central bank’s rate cut path.

The Fed held its benchmark interest rate steady last week but indicated it could cut rates later this year. Non-yielding bullion tends to thrive in a low interest-rate environment. “We maintain our bullish stance on gold, though a consolidation is possible after the recent swift rally towards $3,040/oz,” ANZ analysts said in a note.