Gold pierced through the psychological milestone of $3,000 an ounce on Friday for the first time, building on an historic rally as trade tensions and U.S. rate cut bets supercharge its appeal as a safe haven asset. Spot gold was up 0.4 per cent at $3,000.87 an ounce at 1015 GMT.

U.S. gold futures were up 0.7 per cent to $3,013.60.

Bullion has scaled 13 all-time highs so far this year and is on track for a second straight week of gains.

“The precious metal still has an abundance of reasons to pursue higher prices, including geopolitical and economic concerns, along with the prospects of Fed rate cuts,” said Han Tan, Exinity Group’s chief market analyst.

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U.S. President Donald Trump’s tariffs have played a significant role in raising gold’s demand. The global trade war that has roiled financial markets and raised recession fears is escalating, with Trump on Thursday threatening to slap a 200 per cent tariff on alcohol imports from Europe.

SPDR Gold Trust, the world’s largest gold-backed ETF, said its holdings were at 905.81 metric tons after reaching its highest level since August 2023 in late February. Meanwhile, data on Wednesday showed U.S. consumer prices cooling more than analysts’ expected, potentially creating more room for Federal Reserve rate cuts. The Fed’s next meeting is on Wednesday, where it is widely expected to keep its benchmark overnight interest rate unchanged.

“Next week’s FOMC decision, along with Chair (Jerome) Powell’s signals, are set to dictate whether spot gold remains above or below $3k,” said Tan.

Traders expect policymakers will resume cutting borrowing costs in June.

“We maintain our bullish stance on gold, with prices expected to reach a record high of $3,050 per ounce in 2025,” analysts at ANZ noted.

Spot silver added 0.4 per cent to $33.94 an ounce, platinum lost 0.5 per cent to $989.04 and palladium gained 0.3 per cent to $960.71.