Gold prices climb to record high, UAE rates rise

Gold hit a record high, with investors flocking to safe havens after US President Donald Trump reiterated threats to impose tariffs on Mexico and Canada.

Bullion topped $2,800 for the first time on Friday. The surge came after Trump said he would follow through on imposing 25 per cent levies on imports from Canada and Mexico on February. 1. He also threatened China with measures, without specifying a level. UAE rates for 22 carat gold has risen to Dh313.25 as of Friday afternoon.

The precious metal, on track for its fifth consecutive weekly gain, has benefited from haven demand as Trump's tariff threats spur fears of trade wars that could sap economic growth. There are also worries that his pledges to cut taxes and overhaul immigration may erode US finances and reignite inflation. Federal Reserve Chair Jerome Powell said Wednesday that the US central bank was in "wait-and-see" mode with regard to the potential impact of the new administration's policies.

The Federal Open Market Committee left interest rates unchanged this week as expected "- after cuts at each of the three previous meetings since September "- and indicated that stalled progress toward lower inflation warranted a patient approach.

Traders now will be focused on the Fed's favored inflation gauge, the personal consumption expenditures index "- due later Friday. It's expected to show a slight acceleration in price hikes, according to the median forecast of economists surveyed by Bloomberg.

Spot gold added 0.4 per cent to $2,804.86 an ounce as of 1:14 p.m. in London. The Bloomberg Dollar Spot Index added 0.1 per cent. Platinum rose, while silver and palladium were little changed.