Gold prices near $3,000 amid escalating tariff tensions

Gold hit a record high of $2,993.87 during Friday’s morning session. The market rally has been driven by uncertainty over US tariffs, trade tensions and expectations of Federal Reserve monetary easing.

To make matters worse, the European Union imposed a 50% tax on whiskey shipped from the United States as a counter-move to American tariffs on steel and aluminium. President Trump has since threatened to impose 200% import duties on European wines and other alcohol on his Truth Social account. This has sparked investor fears of inflation and economic instability, thus driving up interest in gold as a safe-haven asset. 

Bullion prices are nearing the psychologically important level of $3,000. With the second quarter in view, tit-for-tat tariffs could spark a new wave of market turbulence and increase demand for the precious metal.

Next week's Federal Reserve meeting will be closely watched by traders. They expect the regulator to keep the key interest rate at 4.25-4.50%. High interest rates often make gold less attractive since it does not earn interest, as reported by Reuters.