Gold topped $3,000 for the first time Friday as US President Donald Trump’s trade disputes boosted the safe-haven metal, while global markets rose on expectations that US lawmakers would avoid a government shutdown. US stocks climbed in early trading after falling in recent sessions, while Asian equities finished the week on a high note.
European stock indexes also rose in afternoon trading after Germany came close to enacting a huge infrastructure and defence expenditure program. In Washington, with only hours till a deadline to pass a Republican spending measure, Senate Democratic Leader Chuck Schumer cancelled his vow to veto it.
The package would keep the government open until September, but Democrats have faced grassroots pressure to oppose the plan, which they claim contains devastating budget cuts. Stocks rose on “a burgeoning sense that a government shutdown will be averted after Senator Schumer said he will vote for the House-passed continuing resolution,” said Patrick O’Hare, an analyst at Briefing.com.
According to O’Hare, markets were also boosted by expectations that China might announce more stimulus measures, as well as indications that negotiations between Canadian and US officials may have made some progress towards alleviating trade tensions. London’s FTSE 100 index gained as the pound fell against the dollar following statistics showing that the UK economy unexpectedly contracted in January.
In the eurozone, Paris and Frankfurt recovered from losses the previous day due to US tariff threats. Friedrich Merz, Germany’s likely next chancellor, said his conservatives had reached an agreement with the Greens to significantly increase defence and infrastructure expenditure, opening the path for the plan’s acceptance in parliament.
Gold, a safe haven in times of uncertainty, surged as high as $3,004 per ounce before retreating later in the day to trade below $3,000. According to Fawad Razaqzada, an analyst at City Index and Forex.com, the precious metal was “boosted on increased haven demand amid trade war risks and recent stock market volatility”.
In his latest salvo, Trump threatened to levy a 200 percent tariff on wine, champagne, and other alcoholic beverages from European Union countries. His statement followed the bloc’s planned taxes on American whisky and other items in response to US steel and aluminium tariffs. Trump stated that he will not back down on metals duties or plans for sweeping tariffs on countries around the world, which are set to begin on April 2. Trade tensions have pounded Wall Street in recent sessions, with the S&P 500 plunging into a correction Thursday, having plummeted more than 10% from its latest top — a record high reached just last month.
In other developments, shares of Gucci-owner Kering fell more than 11 percent in Paris after the business chose a new creative director to lead its faltering flagship brand. BMW shares fell after the German automaker warned that trade tensions between the United States, Europe, and China will cost them $1 billion this year. Major conglomerate CK Hutchison Holdings, owned by tycoon Li Ka-shing, fell in Hong Kong after Chinese officials there reprinted an opinion piece slamming the company over the sale of a controlling share in Panama ports under pressure from Trump.
